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3 Types of Stochastic Indicators

Fast, Slow & Full Stochastic

The three types of Stochastic Oscillators include fast, slow, and full stochastic indicators.

All three types of this stochastic oscillator look at a period of time, like 10 days, and see how the current trading price close is compared to the highest and lowest prices of that time period when figuring out the value of the stochastic oscillator.

The stochastic oscillator works on this idea.

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

The Stochastics Oscillator Technical indicator shows how strong trends are and points out when something is being bought or sold too much.

Fast Stochastic Oscillator Technical

Fast Stochastics draws two lines on the indicator. One is solid, the other dotted. These are the %K line and %D line. In this version, they calculate %K and %D with more smoothing than others.

One disadvantage of using this fast stochastic indicator version is that the %K and %D lines are too sensitive & they often give whipsaws when they get to the over-bought & over-sold levels. The fast stochastic oscillator lines are prone to fake signals/whipsaws.

Slow Stochastic

Slow Stochastic - the slow stochastic oscillator makes the price data smoother that is used for the first calculation and many traders use it. This version of the slow stochastic indicator is less likely to have false signals compared to the fast stochastic oscillator version.

For the slow stochastic, a three-period average smooths the lines. It averages the oscillator data, not price moves.

Full Stochastics Technical

The complete stochastic oscillator indicator,, does not utilize a set MA (Moving Average) period, as the slow gold trading stochastic oscillator variant mentioned above. The stochastic indicator should not be calculated using a set environment, according to traders.

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

The full stochastic oscillator lets traders pick how long they want the fast and slow gold trading stochastic indicator line to look at.

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