Stochastic Oscillator

The Stochastic Oscillator compares where a security's price closed relative to its price range over a given time period.

The Stochastic Oscillator is displayed as two lines. The main line is called "%K." The second line, called "%D," is a moving average of %K. The %K line is usually displayed as a solid line and the %D line is usually displayed as a dotted line.

There are several ways to interpret a Stochastic Oscillator. Three popular methods include:

1. Buy when the Oscillator (either %K or %D) falls below a specific level (e.g., 20) and then rises above that level. Sell when the Oscillator rises above a specific level (e.g., 80) and then falls below that level.
2. Buy when the %K line rises above the %D line and sell when the %K line falls below the %D line.

Look for divergences. For example, where prices are making a series of new highs and the Stochastic Oscillator is failing to surpass its previous highs.

Syntax:

Public Function StochasticOscillator(ByVal HLOCV()() As Double, ByVal Lag As Long, ByVal Slowing As Long) As Double

Parameters:

• ByVal HLOCV()() As Double
• ByVal Lag As Long
• ByVal Slowing As Long

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