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Analysis

Stochastic oscillator — definition & meaning

A momentum tool comparing the close to a recent high-low range.

The stochastic oscillator measures where the current close sits within the recent trading range, on a 0–100 scale, to gauge momentum.

Readings above 80 are considered overbought and below 20 oversold. Traders watch the %K and %D lines cross, especially in ranging markets where the tool tends to work best.

The information on Trding.io is for general information only and is not investment advice. Trading involves a real risk of losing money, and most retail traders lose. Never trade money you cannot afford to lose.

Related terms

Relative strength index (RSI)
A momentum oscillator from 0–100 gauging overbought and oversold conditions.
Momentum
The speed and strength behind a price move.
Divergence
When price and an indicator move in opposite directions.
Volatility
How much and how quickly a price moves over time.
Volume
The number of units traded over a period — a gauge of activity.
Support
A price level where buying has tended to stop a decline.

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