What it measures
The stochastic oscillator shows where the latest close sits within the high–low range of the last N candles, from 0 to 100. %K is the main line and %D its moving average. Readings above 80 mean price closes near the top of its range, below 20 near the bottom.
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Starting settings by expiry
| Expiry | Settings | Signal |
|---|---|---|
| 1 min | 5, 3, 3 on 15-sec candles | Cross in 80/20 zone |
| 5 min | 14, 3, 3 on 1-min candles | Cross in 80/20 zone |
| 15 min | 14, 3, 3 on 5-min candles | Cross + level |
Starting points for testing on a demo account, not proven profitable settings.
How traders use it
- %K crossing %D below 20 favours calls; above 80 favours puts — in ranging markets.
- Combine with support and resistance so signals appear at meaningful prices.
Where it fails
- Very sensitive: many false crosses in trends.
- Similar information to RSI — do not count both as two confirmations.
Works well with
- Bollinger Bands — Volatility bands around a moving average.
- Exponential moving average (EMA) — Trend direction with more weight on recent prices.
FAQ
Stochastic or RSI?
They measure similar things. Stochastic reacts faster; RSI is smoother. Pick one and test it.
ExpiryLab Editorial Research desk We open broker accounts from our target countries, test deposits and withdrawals, and log what we measure.
How this page was made: drafted with AI assistance from public sources and our own test logs, then checked and edited by the ExpiryLab editorial team. The date above shows the last check. How we test · Editorial policy