StochSignal

This strategy uses the Stochastic indicator, enter a trade when the market is oversold(below 20) and exit a trade when the market is overbought(above 80).

This strategy uses the Stochastic indicator, enter a trade when the market is oversold(below 20) and exit a trade when the market is overbought(above 80).

The charted stochastic oscillator actually consists of two lines: the indicator itself is represented by %K, and a signal line reflecting the three-day simple moving average(SMA) of %K, which is called %D.

Like other range-bound momentum oscillators, such as the relative strength index (RSI) and Williams %R, the stochastic oscillator is also useful for determining overbought or oversold conditions. Ranging from 0 to 100, the stochastic oscillator reflects overbought conditions with readings over 80 and oversold conditions with readings under 20.