Fast Stochastic Oscillator

Overview

The Fast Stochastic Oscillator measures where the current close sits within the recent price range, expressed as a percentage from 0 to 100. The indicator consists of two lines: %K, calculated as 100[(Close - Lowest Low)/ (Highest High - Lowest Low)], and %D, a 3-period simple moving average of %K. This fast version applies minimal smoothing, making it highly responsive to price changes and generating more frequent signals than its slower counterpart, though this sensitivity can sometimes lead to premature signals in volatile markets.

Developed as a momentum oscillator, the fast stochastic excels in broad trading ranges or slow-moving trends where price regularly oscillates between support and resistance levels. The indicator's premise is that closing prices tend to close near the high in uptrends and near the low in downtrends. By quantifying this relationship mathematically, the fast stochastic provides clear overbought and oversold readings at 80 and 20 respectively, while the interaction between %K and %D lines generates crossover signals that many traders use for timing market entries and exits.

Interpretation & Trading Signals

Example Usage

Code examples will be available once the Rust implementation is complete.