Stochastic Indices Indicator Crossover Signals
One way to interpret the indices trading signals provided by the Stochastic Oscillator stock indices indicator is similar to a moving average crossover 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 indices trading signals should be taken with scrutiny as, out of the indices trading stochastics oscillator trading signal interpretations discussed so far, they produce the most indices trading whipsaws. Whipsaws or False stock indices signals are especially common in the Fast Stochastic Oscillator Indices Indicator version.
Stochastic Oscillator Crossover Indices Trading Signals:
- For a Sell indices trading signal, a indices trader looks for the %K line to move below the %D line.
- For a Buy indices trading signal, a indices trader looks for the %K line to move above the %D line.
Since stochastic crossovers indices trading signals of %K and %D are often unreliable, they should be verified with other indices technical indicators.
The Stochastic Oscillator Indices 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 trading market trend.
Stochastic Oscillator Center-line 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 indices trading bulls are taking control of the stock indices trading 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 indices trading bears have taken control of the stock indices trading market.