We are here to help

What is stochastic?

Stochastic is an indicator used in technical analysis which compares closing prices in a market to the high and low prices for that market over a given period of time.

Stochastic can be used to determine when a market is overbought or oversold. According to technical analysis, when the stochastic oscillator rises above 80%, the market is overbought, and when the oscillator drops below 20%, the market is oversold. Thus stochastic can be thought of as strong selling or buying signals, respectively.


Was this article helpful?
0 out of 0 found this helpful