StochasticOscillator

The StochasticOscillator is a momentum indicator that compares a security’s closing price to its price range over a specific time period. This indicator is shown as two lines on a chart:

• %K, which is the main line representing the level of the Stochastic Oscillator.
• %D, which is a moving average of %K and typically displayed as a dotted line. The Stochastic Oscillator provides signals for buying and selling:
• Buy Signal: When either %K or %D falls below a certain threshold (e.g., 20) and then climbs back above it.
• Sell Signal: When the Oscillator rises above a higher threshold (e.g., 80) and then drops below it.

These levels indicate overbought or oversold conditions and suggest potential price reversals. The calculation of the Stochastic Oscillator involves several steps:

RawK = 100 * (Close - Lowest(Low, RawPeriod)) / (Highest(High, RawPeriod) - Lowest(Low, RawPeriod))
%K = SMA(RawK, KPeriod)
%D = SMA(%K, DPeriod)

• RawK calculates the raw Stochastic value.
• %K smooths this value using a Simple Moving Average (SMA) over KPeriod.
• %D then takes an SMA of %K over DPeriod to provide a signal line.

Constructor

constructor(
	
): StochasticOscillator;

Properties

Methods

add(bar: Bar): void;