An other standard filter indicator is Stochastic Oscillator
1. Sto.chas.tic (sto kas'tik) adj. 2. Math. designating a process having an infinite progression of jointly distributed random variables.
--- Webster's New World Dictionary

The Stochastic Oscillator is displayed as two lines. The main line is called "%K". The second line, called "%D" is a moving average of %K. The %K line is usually displayed as a solid line and the %D line is usually displayed as a dotted line.

There are several ways to interpret a Stochastic Oscillator. Three popular methods include:

- Buy when the Oscillator (either %K or %D) falls below a specific level (e.g., 20) and then rises above that level. Sell when the Oscillator rises above a specific level (e.g., 80) and then falls below that level.

- Buy when the %K line rises above the %D line and sell when the %K line falls below the %D line.

- Look for divergences. For example, where prices are making a series of new highs and the Stochastic Oscillator is failing to surpass its previous highs.

The Stochastic Oscillator has four variables:
1. %K Periods.
This is the number of time periods used in the stochastic calculation.
2. %K Slowing Periods.
This value controls the internal smoothing of %K. A value of 1 is considered a fast stochastic; a value of 3 is considered a slow stochastic.
3. %D Periods.
This is the number of time periods used when calculating a moving average of %K. The moving average is called "%D" and is usually displayed as a dotted line on top of %K.
4. %D Method.
The method (i.e., Exponential, Simple, Time Series, Triangular, Variable, or Weighted) that is used to calculate %D.

(used Steven B. Achelis "Technical analysis from A to Z")