Stochastic Oscillator Strategy

By Samantha Baltodano

TL;DR:

The Stochastic Oscillator strategy adds simulated buy and sell orders to the more generalized Stochastic Full study. Because it is an oscillator, signals are given based on the observation that as a security’s close price increases, closing price tends to be closer to the upper end of a predetermined price range.

What Is Stochastic Oscillator Strategy?

The Stochastic Overbought/Oversold strategy is based on the Stochastic Full technical indicator. 

The Stochastic Full study is an oscillator based on the observation that as a security’s close price increases, closing price tends to be closer to the upper end of a predetermined price range.

In downtrends, the closing price tends to be near the lower end of the range.

Buy and Sell Signals

The buy and sell triggers for this strategy are derived from the Stochastic Oscillator Crossover Study.

The strategy adds the following buy and sell orders:

• A sell signal is given when the oscillator is above 80 and then crosses back below 80. 
• A buy signal is given when the oscillator is below 20 and then crosses back above 20.

Stochastic Oscillator is just one of many strategies that Archaide automates. For a full list of strategies and studies available click here.

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