The Stochastic indicator is an oscillator.
It helps trace the change in an asset’s price and, therefore, identify the optimum points for entering the market.
The Stochastic consists of 2 lines displayed on a scale from 100 to 0.
The oscillator’s lines cross the boundaries at 20 and 80, which helps identify an overly high or overly low asset price.
The first line (%K) shows the current closing price for the selected price range.
The second (%D) is the simple moving average, which is calculated on the basis of the first line (%K).