Tool
Stochastic Oscillator
market.stochastic
Inputs
No typed inputs.
Outputs
A bundle of two 0-100 lines: k (slow %K) and d (its %D signal SMA).
The Stochastic Oscillator asks one question: where did price close inside its recent high/low range? 100 means at the very top of the range, 0 at the very bottom. The slow %K / %D pair smooths that answer so crosses are tradeable.
How it works
For each bar it takes the highest high and lowest low of the last k_period bars and scores the close inside that range from 0 to 100. That raw score is smoothed with an SMA of smooth_k bars to give %K, and %D is an SMA of %K over d_period bars. %K crossing %D near the extremes (classically above 80 or below 20) is the standard signal.
Configuration
How many bars define the high/low range. 14 is the classic default; larger ranges make the oscillator slower.
SMA length for the %D signal line (classic 3).
SMA length applied to the raw score before it becomes %K. 1 gives the fast stochastic; 3 the slow one.
Connects to
Examples
- Fade extremes: only allow long entries while %K is below 20 (price closing near its range lows).
- Cross trigger: wire k and d into calc.cross to fire when %K crosses above %D.
Common mistakes
- In a strong trend the oscillator can sit pinned above 80 (or below 20) for a long time - overbought does not mean reversal.
- Confusing fast and slow variants: smooth_k=1 is the jumpy fast stochastic; the 14/3/3 default is the slow one.