__What is the Stochastic Oscillator?__The Stochastic Oscillator compares the closing price to the price range of a security over a given period. The Stochastic Oscillator includes two lines: the mainline is called% K; The remaining line% D is the moving average of% K. Normally, the% K line on a chart is drawn immediately and the% D line is dotted.

__Stochastic Oscillator - Where to add on Meta Trader 4?__To add Stochastic Oscillator indicator on Meta Trader 4 software, click Insert -> Indicators -> Oscillators -> Stochastic Oscillator:

__Stochastic Oscillator - Apply to trading__The most common ways to analyze the Stochastic Oscillator are as follows:

- Place a buy order when the indicator (either% K or% D) falls below a certain level (eg, 20) and reverses immediately afterward, above the old level. Place a sell order when the indicator breaks through a certain level (eg, 80) and then falls below the old level again;
- Place buy orders when% K exceeds% D and sell when% K is below% D;
- Look for divergences. For example, when the price is forming a series of highs and the Stochastic Oscillator is unable to cross its previous highs.

__Stochastic Oscillator - How to calculate?__The Stochastic Oscillator includes 4 variables:

- % K periods: Number of periods used to calculate Stochastic indicator;
- % K slow stage: This value measures the smoothness of the% K line. Value 1 is the Fast Stochastic; value 3 is the Slow Stochastic;
- % D periods: Number of periods used to calculate the moving average of% K;
- % D form: Exponential, Simple, Smoothed, or Weighted.

**% K = (CLOSE-LOW (% K)) / (HIGH (% K) -LOW (% K)) * 100**

Inside:

- CLOSE - today's closing price;
- LOW (% K) - lowest low in% K period;
- HIGH (% K) - the highest peak in% K period.

The moving average% D is calculated by the following formula:

**% D = SMA (% K, N)**

Inside:

- N - phase smoothing;
- SMA - Simple Moving Average.

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