Watch the testing video here:
The Stochastic oscillator is another technical indicator that helps traders determine where a trend might be ending.
The oscillator works on the following theory:
- During an uptrend, prices will remain equal to or above the previous closing price.
- During a downtrend, prices will likely remain equal to or below the previous closing price.
This simple momentum oscillator was created by George Lane in the late 1950s.
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