Stochastic: Catching the Swings in Sideways Markets
The Core Idea: It compares a specific closing price to a range of its prices over a certain period, helping you see where the price is relative to its recent history.
Mastering the Signal: It’s all about the %K and %D line crosses in the “Extreme Zones” (above 80 or below 20).
Survivor’s Edge: In a strong trend, Stochastic can stay overbought for a long time. Use it primarily in “Ranging” (sideways) markets for the best accuracy.
Link: Stochastic Standard