Skip to content
Sign inCreate account

Stochastic and VWAP

Where price sits in its recent range, and the volume-weighted average price.

4 min · Intermediate · Lesson 11 of 12

Step 1 of 4

The stochastic oscillator

The stochastic oscillator compares the latest close with the highest high and lowest low of the last 14 days, on a scale of 0 to 100. A reading of 90 means the close is near the top of that range; 10, near the bottom.

  • %K is the main line; %D is a 3-day average of %K, which smooths it.
  • Readings above 80 are often called overbought, and below 20 oversold, meaning price is at an extreme of its recent range.
  • Like RSI, it can stay at an extreme for a long time in a strong trend.

For entertainment and education, not investment advice.