> ## Documentation Index
> Fetch the complete documentation index at: https://learn.algopilot.com/llms.txt
> Use this file to discover all available pages before exploring further.

# Stochastic (Stoch)

**What is it?**\
The Stochastic Oscillator compares an asset’s closing price to its price range over a period, helping identify overbought or oversold conditions. It’s like RSI but focuses on price positioning.

**How is it used?**

* **Overbought/oversold**: Buy when %K crosses above 20; sell when it crosses below 80.
* **Crossovers**: %K crossing above %D is bullish; crossing below is bearish.
* **Divergence**: Divergence between price and Stochastic can signal reversals.

**How is it calculated?**

* **%K**: \[(Current Close - Lowest Low) / (Highest High - Lowest Low)] × 100
* **%D**: 3-period SMA of %K.

%K = \[(Close - Lowest Low(n)) / (Highest High(n) - Lowest Low(n))] × 100  

%D = SMA(%K, 3)  

Typically uses a 14-period lookback. Values above 80 are overbought; below 20 are oversold.

<sub>The above content is designed for informational purposes only, and is explicitly not investment advice. Algo Pilot is a US based technology company and not a bank, broker-dealer, or RIA. As such, Algo Pilot LLC does not provide investment advice and is not a member, SIPC. Brokerage services offered by 3rd parties are not directly affiliated with Algo Pilot LLC, and Algo Pilot users may choose the broker relationship that they desire.</sub>