3 Types of CFD Trading Stochastic Indicators

Fast, Slow & Full Stochastic

There are 3 types of CFD Stochastic Indicators: fast, slow & full stochastic oscillator.

All the 3 versions of this stochastic oscillator cfd indicator look at a given period for example the 10-day period, and measure how today's cfds price close compares to the high and low range of the time period that is being considered in the cfd calculation of stochastic oscillator.

Stochastic oscillator cfd indicator works based on the principle that:

• During an upward trend, cfds price action tends to close at the high of the candle.
• During a downward trend, cfds price action tends to close at the low of the candle.

Stochastic Oscillator indicator shows the strength of the CFD trends, & identifies times when a cfd is oversold or overbought.

Fast Stochastic Oscillator Technical Indicator

Fast Stochastic Indicator - fast stochastic oscillator cfd indicator plots two lines, one solid and one dotted on the indicator section. These 2 lines are called the %K line & %D line. In this editions the %K & %D lines are calculated differently from the other versions, so as to add extra smoothing.

One disadvantage of using this fast stochastic cfd indicator version is that the %K and %D lines are too sensitive and they often give cfd whipsaws when they get to the overbought and oversold levels. The fast stochastic lines are prone to fake signals/whipsaws.

Slow Stochastic Oscillator Technical Indicator

Slow Stochastic Oscillator Indicator - slow stochastic oscillator cfd indicator smoothes out the price data used for the original calculation and it is used by many CFD traders. This slow stochastic cfd indicator version is less prone to whipsaws compared to the fast stochastic version.

For the slow stochastic cfd indicator. A 3 period moving average is used to smooth out the stochastic lines. The moving average is not that of the price action but of the stochastic oscillator lines data.

Full Stochastic Oscillator Technical Indicator

Full Stochastic Indicator - this stochastic oscillator does not use a fixed moving average period, like the slow cfd stochastic oscillator version above. traders don't want to use a fixed setting to calculate the stochastic indicator.

Because of this reason the full stochastic was developed by cfd traders and it is more flexible than the earlier two cfd stochastics oscillator versions.

Full stochastic oscillator cfd indicator version allows cfds traders to choose the period they want for the fast and slow cfd stochastic indicator line.