Trade Stock Indices

3 Types of Index Stochastic Trading Indicators

Stochastic: Fast, Slow, and Full Readings

The Stochastic Oscillator is available in three variations for Indices: fast, slow, and the full stochastic setting.

The three versions of the stochastic oscillator indicator analyze a selected period, such as 10 days, comparing the closing price of the current day with the high and low range within that timeframe. This data is then factored into the calculation of the stochastic oscillator for indices.

Stochastic oscillator works based on the principle that:

  • During an upward trend, price action will tend to close at the high of the candlestick.
  • During a downwards trend, price action tends to close at the low of the candlestick.


The Stochastic Oscillator shows how strong trends are and points out when a currency is either bought too much or sold too much.

Fast Stochastics

Fast Stochastics Indicator - a quick stochastic oscillator shows two lines, one solid and one with dots, on the indicator part of the screen. These two lines are called the %K line and the %D line. In these versions, the %K and %D lines are figured out differently than in other versions, to make them smoother.

One big downside to using this fast stochastic indices indicator is that the %K and %D lines react way too quickly. They're super sensitive, so you end up getting a lot of false signals or “whipsaws,” especially when the market hits overbought or oversold levels. Honestly, the fast stochastic oscillator just throws out too many fake trading signals.

Slow Stochastic Indicator

Slow Stochastics Indicator - slow stochastic oscillator indicator smoothes out price data used for the original calculation & it is used by many Stock Index traders. This slow stochastic Indices indicator version is less prone to whipsaws compared to the fast stochastic edition.

The slow stochastic index uses a 3-period moving average. It smooths the stochastic oscillator lines. This average applies to the indicator data, not price action.

Complete Stochastics Indicator.

Full Stochastics - this stochastic oscillator doesn't have a set MA timeframe, unlike the slow Index stochastic oscillator explained earlier. Traders prefer not to use a specific setting when figuring out the stochastic Stock Index indicator.

Because of this reason the full stochastic was developed by traders & it is more flexible than the earlier two Index stochastic oscillator versions.

Full stochastic oscillator indicator version allows Index traders to choose & select the period they want for the fast & slow Index stochastic indicator line.

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