3 Types of Gold Stochastic Indicators
Fast, Slow and Full Stochastic
There are three types of Gold Stochastic Oscillator Gold Trading Indicators: fast, slow and full stochastic oscillator indicator.
All the 3 versions of this stochastic oscillator gold trading indicator look at a given period for example the 10-day period, and measure how today's gold trading price close compares to the high and low range of the time period that is being considered in the gold trading calculation of stochastic oscillator.
Stochastic oscillator gold trading indicator works based on the principle that:
- During an upward gold trading trend, gold trading price action tends to close at the high of the candle.
- During a downward gold trading trend, gold trading price action tends to close at the low of the candle.
Stochastic Oscillator gold trading indicator shows the strength of the Gold trends, and identifies times when a gold trading is oversold or overbought.
Fast Stochastic Oscillator Gold Trading Indicator
Fast Stochastic Oscillator Gold Trading Indicator - fast stochastic oscillator gold trading indicator plots two lines, one solid and one dotted on the indicator section. These two lines are called the %K line and %D line. In this versions the %K and %D lines are calculated differently from the other versions, so as to add extra smoothing.
One disadvantage of using this fast stochastic gold trading indicator version is that the %K and %D lines are too sensitive and they often give gold trading whipsaws when they get to the overbought and oversold levels. The fast stochastic lines are prone to fake gold trading signals/whipsaws.
Slow Stochastic Oscillator Gold Trading Indicator
Slow Stochastic Oscillator Gold Trading Indicator - slow stochastic oscillator gold trading indicator smooths out the gold price data used for the original calculation and it is used by many Gold traders. This slow stochastic gold trading indicator version is less prone to whipsaws compared to the fast stochastic version.
For the slow stochastic gold trading indicator. a 3 period moving average is used to smooth out the stochastic lines. The moving average is not that of the gold trading price action but of the stochastic oscillator indicator lines data.
Full Stochastic Oscillator Gold Trading Indicator
Full Stochastic Oscillator Gold Trading Indicator - this stochastic oscillator does not use a fixed moving average period, like the slow gold trading stochastic oscillator version above. Gold traders don’t want to use a fixed setting to calculate the stochastic gold trading indicator.
Because of this reason the full stochastic was developed by gold traders and it is more flexible than the earlier two gold trading stochastics oscillator versions.
Full stochastic oscillator gold trading indicator version allows gold traders to choose the period they want for the fast and slow gold trading stochastic indicator line.