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Slow Stochastic

Type

Momentum oscillator

Short introduction

Because the underlying "Fast Stochastic" indicator often reacts too fast to price changes, therefore the Slow Stochastic was introduced.

Statement

A 3-period GD on the Fast Stochastic reduces the number of supposed reversal points.

Formula/calculation

%D = Slow %K = MAn on %K

Slow %D = MAn on %D

Interpretation

Trading rules:

  • If the %D line and the Slow %D line fall below the 20% level, the market appears oversold.
  • If the %D line crosses the Slow %D line from the bottom to the top, a buy signal is generated. Also, the intersection of the D% line with the 20% line from the bottom to the top generates a buy signal.
  • The market appears to be overbought when both lines are above the 80% level.

Default setting


Example: Slow Stochastic

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