The GET Stochastic study is designed to indicate when the market is overbought or oversold. It is based on the premise that when a market's price increases, the closing prices tend to move toward the daily highs and, conversely, when a market's price decreases, the closing prices move toward the daily lows. A Stochastic displays two lines, %K and %D. %K is calculated by finding the highest and lowest point in a trading period and then finding where the current close is in relation to that trading range. %K is then smoothed with a moving average. %D is a moving average of %K.
The GET Stochastic study differs from the "classic" Stochastic study in that it has a unique feature called the False Bar. The False Bar indicates the presence of a strong trend and that the standard overbought and oversold signals should be ignored. The False Bar is intended to help prevent selling or taking a short position in an uptrend and buying or taking a long position in a downtrend.
The study works best when the market is in a non-trending mode where it oscillates between the overbought and oversold ranges. A sell signal is generated when you have a crossover of the %K and the %D when both are above the band set at 75. A buy signal is generated when you have a crossover of the %K and the %D when both are below the band set at 25. However, if a False Bar appears above or below the crossover signal, these signals are not valid and should be ignored.
To apply the GET Stochastic study to a chart, left-click on the GET icon and select GET Stochastic from the drop-down menu.
Alternatively, you can also right-click on the chart, when the menu appears, left-click on Insert Study, left-click on the Advanced GET tab and then select GET Stochastic.
The GET Stochastic study will then appear in a study pane of the chart window.
%K: Indicates the period of the moving average that is used to smooth %K.
Once per Bar: When checked, the alert will not trigger again until the price bar forms.
Alert Action: Select for when an alert triggers, to get a pop up alert, an audio alert, and if configured, an e-mail alert message.