Fast Stochastic Oscillator Cross  Rising
The Fast Stochastic Oscillator Cross trading
strategy is a technical analysis trading strategy that involves using the Fast
Stochastic oscillator to identify potential entry and exit points for a stock.
The strategy involves two main components: the Fast Stochastic oscillator and
its signal line.
The 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.
The signal line is a moving
average of the oscillator, typically a 3period moving average.
The trading strategy involves
waiting for the Fast Stochastic oscillator to cross above or below its signal
line. A cross above the signal line is considered a buy signal, while a cross
below the signal line is considered a sell signal.
This strategy is based on crossings in Fast
Stochastic Oscillator. Typically a buy is generated when a %K (black) line is
crossing a %D (red) line in an upward direction. When %K is crossing %D in
a downward direction it is a sell signal.
This strategy is generating a buy signal on an
upward crossing of %D by %K and only if that crossing occurs below a certain
level a. A sell signal is generated when %D is crossed by %K in a
downward direction above a certain level b. Typically a = 20 and b = 80.
Formula
IF STO%K < a AND STO%D < a
AND STO%D >= STO%K
THEN GO LONG
ELSE
IF STO%K > b AND STO%D > b
AND STO%D <= STO%K
THEN GO SHORT
where STO%K is %K fast stochastic oscillator;
where STO%D is %D fast stochastic oscillator;
and a < b; e.g. a = 20 and b = 80
Stock Research Links
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