Stochastic %K: where price sits in its recent range

The stochastic oscillator asks where today's close sits within the high-to-low range of the last 14 days. If the close is at the very top of that range, %K reads near 100; at the very bottom, near 0. It is a position measurement, not a ratio of gains to losses.

That distinction matters. RSI can be moderate while stochastic is extreme, and vice versa. A stock that drifts up in tiny increments every day will push stochastic toward 100 without generating the lopsided gain/loss ratio that lifts RSI.

Stochastic uses the same 80/20 or 70/30 convention as RSI, and inherits the same weakness: in a strong trend it pins near an extreme and stays there. 'Embedded' is the traditional term for a stochastic stuck above 80 during a powerful advance, and the traditional advice is that it stops being a useful signal while embedded.

This site applies the 70/30 cut for consistency with RSI rather than switching conventions between two indicators that answer nearly the same question.

Stochastic %K and Williams %R are close to mirror images — both read position within a recent high-low range, differing mainly in sign and scaling. Scoring both at full weight would count one observation twice.

That is handled explicitly in the weighting rather than by dropping one of them: Williams %R gets the smallest momentum weight on the site precisely because stochastic is already carrying that idea.