Over the years numerous
technical indicators have been developed to describe the stock performance, or,
hopefully to predict future price movements. In this section we introduce five
of the most useful indicators, provide examples, and explain how they are
Figure 7. K/D
KD stands for two Stochastic indicators K and D.
In order to compute the p-period K, one needs
to compute the p-period high Hp and low Lp,
then the fast Stochastic K is given by
The q-period slow Stochastic D is simply the
q-period moving average of K. Many people simply
refer to D by calling it KD.