> For the complete documentation index, see [llms.txt](https://guide.bytemine.io/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://guide.bytemine.io/stochastic-oscillator.md).

# Stochastic Oscillator

## Description

A stochastic oscillator is a momentum indicator comparing a particular closing price of a security to a range of its prices over a certain period of time. The sensitivity of the oscillator to market movements is reducible by adjusting that time period or by taking a moving average of the result. It is used to generate overbought and oversold trading signals, utilizing a 0-100 bounded range of values.

Traditionally, readings over 80 are considered in the overbought range, and readings under 20 are considered oversold

## Trading Strategy

A buy signal is produced when the Stochastic Oscillator is below the minimum threshold and the slow k crosses below the slow d. A sell signal is produced when the indicator is above the maximum threshold and the slow k crosses above the slow d.