How To Use The Stochastic Oscillator

A lesson from EWI's Jeffrey Kennedy

By Elliott Wave International

The stochastic oscillator is a technical tool that was popularized by George Lane. It is a momentum indicator based on the idea that in an uptrending market the close tends to be near the high of the price bar, and in a downtrending market the close tends to be near the low of the price bar.
Watch an 11-minute lesson from Jeffrey Kennedy's Trader's Classroom to learn how you can use this popular indicator in your analysis and trading.

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This article was syndicated by Elliott Wave International and was originally published under the headline How to Use the Stochastic Oscillator. EWI is the world's largest market forecasting firm. Its staff of full-time analysts led by Chartered Market Technician Robert Prechter provides 24-hour-a-day market analysis to institutional and private investors around the world.