Where does today's close sit inside the recent range? The Stochastic Oscillator returns that position as a 0–100 number, then reads momentum shifts through the %K / %D pair.
The Stochastic Oscillator was introduced by George C. Lane in the late 1950s. It begins from a simple observation: in rallies, closes tend to cluster near the high of the recent range; in declines, they cluster near the low. From that, the indicator computes where today's close sits within the recent n-period range, expressed as a number from 0 to 100.
Where RSI measures the ratio of gains to losses, Stochastic measures position within range. A useful framing: RSI reads momentum; Stochastic reads where you are inside the corridor.
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