What is the Stochastic?

The Stochastic indicator is an oscillator.

It helps trace the change in an asset’s price and, therefore, identify the optimum points for entering the market.

The Stochastic consists of 2 lines displayed on a scale from 100 to 0.

The oscillator’s lines cross the boundaries at 20 and 80, which helps identify an overly high or overly low asset price.

The first line (%K) shows the current closing price for the selected price range.

The second (%D) is the simple moving average, which is calculated on the basis of the first line (%K).