Stochastic Oscillator 14 3 3 (STOCH) is a range bound momentum oscillator. The Stochastic 14 3 3 indicator is designed to display the location of the close compared to the high/low range over a user defined number of periods.
Stochastic Oscillator 14 3 3 is used to:
(1) Identify overbought and oversold levels
(2) find divergences and
(3) identify bull and bear set ups or crypto signals.
Meaning of Stochastic 14 3 3 indicator
Stochastic 14 3 3 meaning: STOCH 14 3 3 is a range-bound oscillator consisting of two lines that move between 0 and 100. The first line (known as %K) displays the current close in relation to a user-defined period’s high/low range. The second line (known as %D) is a simple moving average of the %K line. Now, as with most indicators, all of the periods used within Stochastic 14 3 3 can be user defined. That being said, the most common choices are a 14 period %K and a 3 period SMA for %D.
The basic understanding is that Stochastic 14 3 3 uses closing prices to determine momentum. When prices close in the upper half of the look-back period’s high/low range, then the Stochastic Oscillator 14 3 3 (%K) rises also indicating an increase in momentum or buying/selling pressure. When prices close in the lower half of the period’s high/low range, %K falls, indicating weakening momentum or buying/selling pressure.
Much like with any range-bound indicator, Overbought/Oversold conditions are a primary signal generated by the Stochastic Oscillator 14 3 3. The default thresholds are 20 for oversold and 80 for overbought.
It is typically best to trade along with the trend when using Stochastic 14 3 3 to identify overbought/oversold levels. The reason is that overbought does not always mean a bearish move just like oversold does not always mean a bullish move. Many times overbought (oversold) conditions can be a sign of a strengthening trend and not necessarily an impending reversal.
The Stochastic Oscillator 14 3 3 is usually plotted with a 3-day simple moving average that acts as the trigger line. When the Stochastic Oscillator 14 3 3 crosses above the trigger line it is a bullish moving average crossover, and when it crosses below it is bearish.
FAQs
The Stochastic Oscillator 14 3 3 is usually plotted with a 3-day simple moving average that acts as the trigger line. When the Stochastic Oscillator 14 3 3 crosses above the trigger line it is a bullish moving average crossover, and when it crosses below it is bearish.
What is the stochastic RSI setting 14 14 3 3? ›
Stochastic Oscillator (14, 3, 3):
The most common parameters for the Stochastic Oscillator are (14, 3, 3), which means: 14-period %K: The current closing price minus the lowest price over the last 14 periods, divided by the highest price minus the lowest price over the last 14 periods.
What does stochastic 5 3 3 mean? ›
The responsive 5-3-3 setting will flip buy and sell cycles frequently, often without the lines reaching overbought or oversold levels. The mid-range 21-7-7 setting will look back at a longer period but keeps smoothing at relatively low levels.
What is a good stochastic number? ›
The stochastic indicator is scaled between 0 and 100. A reading above 80 indicates that the instrument is trading near the top of its high-low range. A reading below 20 signals that the instrument is trading near the bottom of its high-low range.
What is the best setting for fast stochastic? ›
The default settings are 5, 3, 3. Other commonly used settings for Stochastics include 14, 3, 3 and 21, 5, 5. Stochastics is often referred to as Fast Stochastics with a setting of 5, 4, Slow Stochastics with a setting of 14, 3 and Full Stochastics with the settings of 14, 3, 3.
What is the best stochastic setting for swing trading? ›
We use a stochastic oscillator to find the entry levels. The recommended settings are: Periods: 14, 3, and 3; Levels: 90% and 10%.
What is the best stochastic RSI setting? ›
The default settings for the StochRSI indicator are as follows. K= 3, D = 3, RSI = 14, and Stochastic Length= 14. These default settings work well for 15 15-minute timeframes and above. Change your Stochastic Length to 8 for a smaller timeframe.
What is the formula for stochastic fast? ›
The Stochastic Fast Formula
Fast %K: [(Close – Low) / (High – Low)] x 100. Fast %D: Simple moving average of Fast K (usually 3-period moving average)
Is stochastic better than RSI? ›
Stochastic RSI vs.
One key difference is how quickly the indicators move. StochRSI moves very quickly from overbought to oversold or vice versa, while RSI is a much slower-moving indicator. One isn't better than the other: stochRSI just moves more (and more quickly) than the RSI.
What is the best oscillator indicator for swing trading? ›
The best swing trading indicators are RSI, MACD, Bollinger Bands, and moving averages. These tools help traders identify trends, measure momentum, and determine entry and exit points.
Stochastics are a favored technical indicator because they are easy to understand and have a relatively high degree of accuracy. It falls into the class of technical indicators known as oscillators. The indicator provides buy and sell signals for traders to enter or exit positions based on momentum.
What is stochastic 14? ›
The stochastic indicator analyzes a price range over a specific time period or price candles; typical settings for the Stochastic 14 periods/price candles. The Stochastic indicator takes the highest high and the lowest low over the last 14 candles and compares it to the current closing price. It is as simple as that.
How to use a stochastic indicator for scalping? ›
When the stochastic oscillator generates a buy or sell signal, confirming it with a Fibonacci retracement level can provide additional validation for the trade. Scalpers can look for confluence between the oscillator's signals and key Fibonacci levels to increase the probability of a successful trade.
What is the best Stoch RSI setting for a 15-minute chart? ›
The best stochastic settings for a 15-minute stock chart is generally a 14-period %K (fast stochastic line) and a 3-period %D (slow stochastic line) with settings of 14,3,3.
What is the 14 day stochastic oscillator? ›
The standard time period used is 14 days, though this can be adjusted to meet specific analytical needs. The stochastic oscillator is calculated by subtracting the low for the period from the current closing price, dividing by the total range for the period, and multiplying by 100.
What is StochRSI 14? ›
StochRSI measures the value of RSI relative to its high/low range over a set number of periods. The number of periods used to calculate StochRSI is transferred to RSI in the formula. For example, 14-day StochRSI would use the current value of 14-day RSI and the 14-day high-low range for 14-day RSI.
What is the RSI 14 setting? ›
Setting the RSI Period:
For intraday trading purposes, a default period setting is 14, reflecting the analysis of the past 14 price bars. Adjusting this period value permits fine-tuning of your analysis in alignment with your trading style and the specific asset being traded.
