Stochastic indicator on Yahoo

Beginner Questions
1

Hi,

I am finding when I apply the Stochastic indicator on Yahoo that it gives me a range going above 100 and below 0. Given this is a oscillator I would have thought it couldn’t go above 100 or below 0. I have attached a screenshot. I am guessing they are calculating this in a different way then normal. Any thoughts?

Thanks

Richard

Yahoo EURUSD.jpg700×700 79.8 KB

2

Cases in which it goes above 100 or below 0 are extreme conditions were the market is extremely volatile. It can help in spotting overbought or over sold levels.

3

How does the maths allows this though as the calculation does the following:

  1. The current Close minus the lowest low in x amount of periods - This has to equal to zero or higher because if it was negative then you would be saying the current close is lower then the lowest low which isn’t logical.
  2. The highest high minus the lowest low in x amount of periods - again has to be a positive number or zero.
  3. It divides the above which therefore must produce a result between 100 and 0.

Am I miscalculating?

Thanks