Trends/Momentum oscillators

Stochastic oscillator

Shows where the close sits inside the high-to-low range of the last 14 bars, from 0 to 100.

Momentum oscillatorsBest on 3M, 6M, 1YAlso called stochastics

Illustration of the stochastic oscillator shape. It is a sketch, not real price data.

What it shows

George Lane's stochastic oscillator asks: where did the close land in the recent range? A value of 100 means the close is at the highest high of the last 14 bars. A value of 0 means it is at the lowest low.

Two lines are drawn: %K (the raw value, smoothed) and %D (a 3-bar average of %K).

How we find it

The same code that draws it on your chart follows these steps, with the same result every time.

Find the highest high and lowest low of the last 14 bars.
%K raw = (close − lowest low) ÷ (highest high − lowest low) × 100.
Smooth %K with a 3-bar average. %D is a 3-bar average of that.
Plot with lines at 20 and 80.

Starting values: Length 14; Smoothing 3; Upper line 80; Lower line 20. These are proposed and will be tuned on real price data before launch.

How to read it

Blue line is %K. Gold line is %D.
Dashed lines mark 80 and 20.
High values mean the close is near the top of the recent range.

Status labels you may see

Label	What it means
Above 80	%K is above 80.
Between 20 and 80	%K is in the middle.
Below 20	%K is below 20.

What cancels it

Nothing cancels it.

What traders check next

How long it stayed above 80 or below 20.
Where %K crosses %D.
The trend of the price.

Limits

It stays high in strong uptrends.
It is noisy on short time frames.
Settings change the look.

Try it in forecastviz

Open any ticker and choose Momentum oscillators → Stochastic oscillator in the left menu.
Switch between 3M, 6M, 1Y to see how the picture changes.
Compare with Stochastic RSI and Relative strength index on the same chart.

Open on a ticker

Questions

How is it different from RSI?

It looks at where the close sits in the range, not gains versus losses.

What is %D?

A smoothed copy of %K.