Fast Stochastic Crossing and Stop Loss
Fast Stochastic, also known as the Fast Stochastic
Oscillator, is a technical analysis indicator used to measure the momentum of a
stock's price. The oscillator compares the closing price of the stock to its
price range over a specified period of time, typically 14 periods.
The Fast Stochastic oscillator
is calculated by taking the difference between the current closing price and the
lowest price over the specified period, divided by the difference between the
highest price and the lowest price over the specified period. The resulting
value is then multiplied by 100 to produce a percentage value between 0 and 100.
Traders often use the Fast
Stochastic oscillator to identify potential overbought or oversold conditions in
the stock. Readings above 80 indicate that the stock is overbought and may be
due for a correction, while readings below 20 indicate that the stock is
oversold and may be due for a rebound.
This is a modification of "Fast
Stochastic Crossing" strategy where a stop loss sell signal is added.
Stop loss signal is generated on a day when the closing price of the stock fell
down from the last buying price %p percent.
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