Stochastic Commodities Indicator Crossover Signals

One way to analyze the signals provided by the Stochastic Oscillator indicator is similar to a moving average cross over commodity strategy. In the Stochastic oscillator indicator, a crossover signal happens when the %K & %D lines cross over. These crossover signals should be taken with scrutiny as, out of the commodity stochastics oscillator signal interpretations discussed so far, they produce the most commodity whipsaws. Whipsaws or False trading signals are especially common in Fast Stochastic Oscillator Commodities Indicator version.

Stochastic Oscillator Crossover Trading Signals:

• For a Sell signal, a trader looks for %K line to move below the %D line.
• For a Buy commodities trade signal, a trader looks for the %K line to move above the % D line.

Since stochastic crossovers signals of %K and %D are often unreliable, they should be verified with other technical indicators.

The Stochastic Oscillator Commodities Indicator Center-line

The stochastic oscillator center-line lies at the 50% level in the stochastic indicator panel. It implies that there is a balance between bulls and bears. Situations when the stochastic indicator crosses the center-line can give an insight into whether the buyers or sellers will begin to control the trend.

Stochastic Oscillator Center-line Commodity Crossovers Signals

• If the Stochastic oscillator indicator is staying below the center-mark (between 40%-50%) and crosses up, then it is an indication that the commodity bulls are taking control of the market.
• If the Stochastic oscillator indicator is staying above the center-mark (around 50%-60%) and then crosses below the center-mark, it can be an indication that the commodity bears have taken control of the market.