Stochastic is an oscillator that detects the momentum of price. As a rule, the momentum changes direction before the price. It is plotted in the chart window and consists of two lines:
- Fast %K
- Slow %D
The behavior of the indicator is interpreted in two ways.
The first one is the crossing of K and D lines. When the K line crosses the D line from top to bottom, it is considered to be a signal to sell (short), when the K line crosses the D line from bottom to top, it is a signal to buy (long).
![](https://help.veles.finance/wp-content/uploads/2023/10/image-18-1024x673.png)
The second is the exit of both indicator lines from overbought / oversold zones. When both K and D lines cross the oversold boundary (20) from bottom to top, it is a buy signal (long), and when both K and D lines cross the overbought boundary from top to bottom, it is a sell signal (short).
![](https://help.veles.finance/wp-content/uploads/2023/10/image-19-1024x564.png)
In the Veles platform there are two types of Stochastics – fast and slow.
Fast for K calculations uses 5 periods and is more volatile.
![](https://help.veles.finance/wp-content/uploads/2024/03/image-5.png)
Slow for K calculations uses 14 periods according to the formula of fast Stochastics, and is also smoothed by three periods of SMA.
![](https://help.veles.finance/wp-content/uploads/2024/03/image-6.png)