3 Types of Oil Stochastic Indicators

Fast, Slow & Full Stochastic

There are 3 types of Oil Stochastic Oscillators: fast, slow & full stochastic indicator.

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

Stochastic oscillator indicator works based on the principle that:

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

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

Fast Stochastic Oscillator Technical Indicator

Fast Stochastic Oscillator Technical Indicator - fast stochastic oscillator 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 indicator version is that the %K and %D lines are too sensitive and they often give oil whipsaws when they get to the overbought and oversold levels. The fast stochastic lines are prone to fake crude trade signals/whipsaws.

Slow Stochastic Oscillator Technical Indicator

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

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

Full Stochastic Oscillator Technical Indicator

Full Stochastic Oscillator Technical Indicator - this stochastic oscillator does not use a fixed moving average period, like the slow oil 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 traders and it is more flexible than the earlier two stochastics oscillator versions.

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