01Entry idea
Oversold %K/%D cross
A mean-reversion long that fires when momentum confirms a turn from oversold.
MomentumExpert Curated · Playbook
Stoch
Stochastic Oscillator
A bounded 0–100 oscillator that measures where the close sits relative to the high-low range over a chosen lookback — paired with a smoothed signal line for crossover triggers.
Developed by George Lane in the 1950s, the Stochastic Oscillator compares the current close to the trading range of the past N bars (typically 14). The fast %K line ranges 0–100, and a smoothed %D line (default 3-period SMA of %K) acts as a trigger. Readings above 80 are conventionally "overbought," below 20 "oversold."
Stochastic shines in ranging markets where price oscillates between support and resistance — the %K/%D crossovers in oversold/overbought zones produce reliable mean-reversion signals. In strong trends it tends to lock in extremes for long stretches, so use a trend filter alongside it.
How to get in
Entry ideas
03ideas
02Entry idea
Trend-following pullback
A trend-aligned long that buys momentum resets in confirmed uptrends.
03Entry idea
Bullish stochastic divergence
A reversal-anticipation entry that spots fading downside momentum before price turns.
How to get out
Exit ideas
03ideas
01Exit idea
Overbought %K/%D cross
A symmetrical exit that mirrors the oversold-cross entry.
02Exit idea
Momentum peak exit
An early exit that catches momentum exhaustion before the full %K/%D cross fires.
03Exit idea
Bearish stochastic divergence
A proactive exit triggered when rising price stops producing rising momentum.
Other things it's good for
Utilities
02ideas
01Utility
Trend bias filter
A directional filter that keeps trades aligned with prevailing momentum.
02Utility
%K/%D direction agreement
A confirmation filter that requires both Stochastic lines to point the same way.