Stochastic Indicator Crossover Signals

One way to interpret the Stock Indices trading signals provided by the Stochastic Oscillator Stock Indices indicator is similar to a moving average crossover Stock Indices trading strategy. In the Stochastic oscillator Stock Indices indicator, a crossover Stock Indices signal happens when the %K and %D lines crossover.

These crossover Stock Indices signals should be taken with scrutiny as, out of the Stock Indices stochastics oscillator trading signal interpretations discussed so far, they produce the most Stock Indices trading whipsaws. Whipsaws or False Stock Indices trading signals are especially common in the Fast Stochastic Oscillator Indicator version.

Stochastic Oscillator Crossover Signals:

• For a Sell Stock Indices signal, a trader looks for the %K line to move below the %D line.
• For a Buy Stock Indices signal, a trader looks for the %K line to move above the %D line.

Since stochastic crossovers Stock Indices trading signals of %K and %D are often unreliable, they should be verified with other Stock Indices technical indicators.

The Stochastic Oscillator Indicator Center-line

The stochastic oscillator center-line lies at the 50% level in the stochastic Stock Indices indicator panel. It implies that there is a balance between bulls and bears. Situations when the stochastic Stock Indices indicator crosses the center-line can give an insight into whether the buyers or sellers will begin to control the Stock Indices market trend.

Stochastic Oscillator Center-line Stock Indices Trading Crossovers Signals

• If the Stochastic oscillator Stock Indices indicator is staying below the center-mark (between 40%-50%) and crosses up, then it is an indication that the Stock Indices bulls are taking control of the Stock Indices market.
• If the Stochastic oscillator Stock Indices indicator is staying above the center-mark (around 50%-60%) and then crosses below the center-mark, it can be an indication that the Stock Indices bears have taken control of the Stock Indices market.