The stochastic indicator can be used to identify overbought and oversold readings. It can also predict trend reversals. There are a variety of strategies that traders use with the indicator. The indicator is most effective in broad trading ranges or slow-moving trends.

How accurate is stochastic indicator?

Stochastics are a favored technical indicator because it is easy to understand and has a high degree of accuracy. ... it can be beneficial to use stochastics in conjunction with and an oscillator like the relative strength index (RSI) together.

Which indicator works best with stochastic?

Some of the best technical indicators to complement the stochastic oscillator are moving average crossovers and other momentum oscillators. Moving average crossovers can be used as a complement to crossover trading signals given by the stochastic oscillator.