Stochastics
The Stochastic indicator, developed by George Lane, can be a valuable tool for identifying near-term tops and bottoms to help in timing trades closer to local reversal points. It measures the placement of a current price within a recent trading range under the theory that as a market rises, close prices tend to occur nearer to the high end of their recent range. When prices trend higher and closes begin to sag within the range, it signals internal market weakness.
Stochastics is one of a few indicators that uses two lines, known as the K and D lines (sometimes known as %K and %D). The D line is simply a smoothed version of the K, and the two of them are analyzed for both overbought and oversold situations just like RSI. Two lines ...
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