Friday, August 21, 2009

Stochastics (Common Chart Indicators)

Stochastics are another indicator that helps to determine where a trend might be ending. It is an oscillator that measures overbought and oversold conditions in the market. The two lines are similar to the MACD lines in the sense that one line is faster than the other.

Stochastics are scaled from 0 to 100. When the lines are above 70, it means the market is overbought. When the lines are below 30, it means the market is oversold.


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