Stochastic Cross

%K crossing %D in oversold territory. Classic momentum timing.

What it is

Reference — Glowwiki: Stochastic Oscillator
The definitions and formulas below follow that article. It states its own limit plainly:
“Whether this produces profit is not addressed in that article.”
That is the question this page answers.

Note from the reference: The reference supports two opposite responses to the same extreme reading — mean reversion, and the "stochastic pop" where prices break out and keep going, read as a reason to add. It does not choose between them. This page implements the mean-reversion reading. It also states that working with %D alone there is only one valid signal: a divergence between %D and the security.

Formulas

%K = 100 · (C − Lₙ) / (Hₙ − Lₙ)

Hₙ and Lₙ are the high and low of the last n bars — the current bar included, by definition

%D = SMA₃(%K)

Simple, not exponential. Implementations differ here; this page uses the simple average.

Established

Stochastic is grouped with RSI and MACD as an oscillator indicator. [1]
The high and low in the formula are the highest and lowest prices of the last n bars — the current bar among them. Including it is the definition, not an implementation choice. [3]

These rest on a single line of sourcing. The Glowwiki reference article draws on the same encyclopaedia cited here, so two domains do not make two independent accounts. Nothing below has been checked against a second, separately grounded source. It is listed as established because the sources state it as definition rather than as finding — not because it has been cross-verified.

Conventional reading

A %K crossing above %D from an oversold zone is conventionally read as an entry signal. [2]
The signal line may be a simple or an exponential moving average depending on the implementation. This page uses the simple form, which is why the numbers here can differ from a platform using the exponential one. [1, 3]
Working with %D alone the reference allows only one valid signal — a divergence between %D and the security. Anything else read from %D by itself is not supported by it. [1, 3]
The same extreme reading supports the opposite response as well: the "stochastic pop", where price breaks out and keeps going, is read as a reason to add rather than to fade. The reference presents both and does not choose. This page implements the mean-reversion reading. [1, 3]
The usefulness of technical analysis as a whole is contested by the efficient-market hypothesis. The reference article states the dispute without ruling on it — and neither does this page. What is below is one measurement, not a verdict. [1, 2]

Listed as convention, not as established fact.

Sources

Stochastic Oscillator — Glowwiki (en)
Technical analysis — Wikipedia (en)
Stochastic oscillator — Wikipedia (en)

The short answer

Beat buy & hold in none of the 3 markets tested.

Gold (PAXG) -98% · BTC/USDT -576%. A rule that wins in one market and loses in another did not find an edge; it found a rising asset. Each figure is measured only against buying and holding that same market over that same period.

Market	Return	Buy & hold	vs B&H	Beat it	Max DD	Underwater	Grid beat
BTC/USDT	-46%	530%	-576%	no	77%	3168d	0%
ETH/USDT	-90%	276%	-366%	no	92%	3160d	0%
Gold (PAXG)	20%	119%	-98%	no	22%	1007d	0%

All figures on this page are from daily candles unless a row says otherwise.

Evidence

Everything below is the same rules run over real price history. Pick a market to see the fills, the equity path and the parameter grid for it.

Daily candlesBTC/USDT · 3188 bars · 2018-01-01 → 2026-09-23

Total return

-46.2%

10,000 → 5,376

vs buy & hold

-576.1%

over the same period 529.9%

Max drawdown

76.8%

10,000 → 2,704

Longest underwater

3168

3168 days · 99% of the period

Settings that beat it

0 / 16

of 16 parameter settings tested

Win rate

63%

95% CI 51%–73% · n=70

A 0% risk of ruin here is a property of the test, not a safety rating. These runs are long-only spot with no borrowed money, so there is no margin call and nothing can force the position closed. The account cannot be wiped out — it gets stuck holding the asset instead. Capital deployed (1×) and max drawdown (76.8%) are the numbers that carry the risk on this page. The same rules run on margin would be a different measurement, and this figure would not stay at zero.

Daily candles

account equitybuy & holddashed = starting capital

140 fills. Signals are taken on the close and filled at the next open.

Timeframe

Everything above uses the daily row. These are the same rules and the same parameters on a different candle size.

Timeframe	Return	Buy & hold	vs B&H	Beat it	Trades
4H	-78%	524%	-602%	no	410
1D ←	-46%	530%	-576%	no	70
1W	6%	524%	-518%	no	10

Outcome distribution

A single return is one chosen start date. These are 95 runs of the same rules with the start shifted forward 30 days at a time.

Worst	p10	p25	Median	p75	p90	Best	Losing starts
-49.8%	-35.3%	-29.3%	-0.7%	24.5%	37.8%	65.8%	51%

Does it survive its own parameters?

The headline above uses one parameter setting. Here is every setting tested: 16 combinations, median -46.2%, best -25.3%, worst -61.6%. 0 of them beat buy & hold.

A strategy that only works at one setting did not work — it was fitted.

Parameter grid

Stochastic Cross run across its own parameter range over the full period. The same rules flip from profit to loss depending only on the numbers you picked — which is why a single headline return is meaningless on its own.

	k 9	k 14	k 21	k 30
buyBelow 15	-35%	-59%	-55%	-62%
buyBelow 20	-49%	-55%	-53%	-43%
buyBelow 25	-37%	-46%	-30%	-35%
buyBelow 35	-55%	-25%	-46%	-41%

Hover a cell for trade count and drawdown. “·” = invalid combination (fast ≥ slow).

Year by year

Year	2018	2019	2020	2021	2022	2023	2024	2025	2026
Return	-50%	-9%	-26%	29%	-31%	54%	21%	-9%	-25%
Max DD	63%	37%	52%	34%	57%	20%	21%	24%	34%
Trades	7	6	5	9	8	6	9	8	6

Recent closed trades 70 closed trades — showing the last 40

Entered	Entry	Exited	Exit	Held	Size	P&L (USDT)	Return
2026-09-13	77,317.37	2026-09-21	81,137.42	8 bars	5,132.69	+242.83	+4.7%
2026-07-30	64,016.28	2026-08-10	64,869.14	11 bars	5,075.35	+57.34	+1.1%
2026-05-19	77,040.38	2026-07-08	63,332.32	50 bars	6,186.25	-1,110.9	-18.0%
2026-05-01	76,384.75	2026-05-05	79,821.08	4 bars	5,931.78	+254.47	+4.3%
2026-03-24	70,941.9	2026-04-16	74,772.59	23 bars	5,639.16	+292.62	+5.2%
2026-01-23	89,604.46	2026-03-06	70,855.57	42 bars	7,145.59	-1,506.44	-21.1%
2025-12-17	87,907.36	2026-01-06	93,812.78	20 bars	6,709.19	+436.4	+6.5%
2025-11-02	110,153.15	2025-12-05	92,032.02	33 bars	8,046.31	-1,337.12	-16.6%
2025-10-20	108,697.09	2025-10-29	112,841.99	9 bars	7,766.27	+280.04	+3.6%
2025-09-25	113,363.66	2025-10-04	122,171.09	9 bars	7,220.82	+545.45	+7.5%
2025-07-27	117,978.95	2025-09-13	115,971.4	48 bars	7,360.52	-139.7	-1.9%
2025-06-23	101,014.35	2025-06-28	106,994.06	5 bars	6,963.07	+397.45	+5.7%
2025-06-02	105,695.75	2025-06-12	108,590.81	10 bars	6,791	+172.07	+2.5%
2025-04-01	82,591.27	2025-04-19	84,432.46	18 bars	6,656.21	+134.79	+2.0%
2025-02-08	96,555.05	2025-03-26	87,349.18	46 bars	7,372.45	-716.24	-9.7%
2024-12-22	97,340.65	2025-01-20	101,280.9	29 bars	7,099.82	+272.63	+3.8%
2024-11-06	69,406.7	2024-11-11	80,329.82	5 bars	6,146.68	+953.14	+15.5%
2024-10-05	62,117.04	2024-10-17	67,586.19	12 bars	5,660.59	+486.09	+8.6%
2024-09-03	59,161.69	2024-09-16	59,102.43	13 bars	5,677.61	-17.02	-0.3%
2024-08-02	65,386.7	2024-08-27	62,802.58	25 bars	5,923.06	-245.45	-4.1%
2024-06-16	66,261.36	2024-07-18	64,055.95	32 bars	6,139.25	-216.19	-3.5%
2024-06-04	68,844.29	2024-06-07	70,763.66	3 bars	5,984.69	+154.56	+2.6%
2024-04-15	65,694.68	2024-05-20	66,240.86	35 bars	5,947.23	+37.46	+0.6%
2024-03-25	67,243.6	2024-03-31	69,547.38	6 bars	5,761.74	+185.49	+3.2%
2024-01-16	42,532.36	2024-02-01	42,558.71	16 bars	5,769.7	-7.96	-0.1%
2024-01-01	42,304.72	2024-01-10	46,086.94	9 bars	5,306.8	+462.9	+8.7%
2023-10-15	26,865.91	2023-10-24	33,053.46	9 bars	4,322.01	+984.79	+22.8%
2023-07-08	30,359.87	2023-09-17	26,546.39	71 bars	4,952.78	-630.77	-12.7%
2023-06-10	26,491.04	2023-06-22	29,978.89	12 bars	4,385.31	+567.46	+12.9%
2023-04-23	27,830.76	2023-05-30	27,722.52	37 bars	4,411.25	-25.94	-0.6%
2023-03-06	22,441.46	2023-03-21	27,703.15	15 bars	3,580.57	+830.68	+23.2%
2023-02-08	23,254.04	2023-02-20	24,260.37	12 bars	3,438.92	+141.65	+4.1%
2022-12-19	16,747.37	2023-01-10	17,170.45	22 bars	3,360.9	+78.02	+2.3%
2022-11-11	17,611.25	2022-12-03	17,083.58	22 bars	3,471.64	-110.75	-3.2%
2022-10-17	19,272.61	2022-10-31	20,617.17	14 bars	3,251.73	+219.91	+6.8%
2022-08-22	21,527.46	2022-10-07	19,950.69	46 bars	3,515.75	-264.02	-7.5%
2022-07-14	20,244.99	2022-07-21	23,211.69	7 bars	3,072.54	+443.21	+14.4%
2022-04-10	42,775.34	2022-07-10	21,581.35	91 bars	6,102.13	-3,029.58	-49.6%
2022-03-09	38,750	2022-03-21	41,241.48	12 bars	5,744.96	+357.16	+6.2%
2022-02-23	38,249.45	2022-03-03	43,871.04	8 bars	5,018.84	+726.13	+14.5%

Prices include slippage; size is what was actually committed to that trade including fees.

Assumptions

Period	2018-01-01 → 2026-09-23
Parameters	{"k":14,"d":3,"smoothK":1,"buyBelow":25}
Rolling test	365 bars × 95 start dates
Input hash	2e8ae99ceb71c908

Daily candlesETH/USDT · 3188 bars · 2018-01-01 → 2026-09-23

Total return

-90.2%

10,000 → 983

vs buy & hold

-365.9%

over the same period 275.8%

Max drawdown

92.2%

10,000 → 983

Longest underwater

3160

3160 days · 99% of the period

Settings that beat it

0 / 16

of 16 parameter settings tested

Win rate

95% CI 0%–39% · n=6

Daily candles

account equitybuy & holddashed = starting capital

13 fills. Signals are taken on the close and filled at the next open.

Timeframe

Everything above uses the daily row. These are the same rules and the same parameters on a different candle size.

Timeframe	Return	Buy & hold	vs B&H	Beat it	Trades
4H	-90%	271%	-362%	no	38
1D ←	-90%	276%	-366%	no	6
1W	-50%	271%	-321%	no	9

Outcome distribution

A single return is one chosen start date. These are 95 runs of the same rules with the start shifted forward 30 days at a time.

Worst	p10	p25	Median	p75	p90	Best	Losing starts
-90.2%	-57.0%	-37.7%	-14.4%	19.4%	56.2%	105.6%	58%

Does it survive its own parameters?

The headline above uses one parameter setting. Here is every setting tested: 16 combinations, median -90.8%, best -90.1%, worst -93.3%. 0 of them beat buy & hold.

A strategy that only works at one setting did not work — it was fitted.

Parameter grid

	k 9	k 14	k 21	k 30
buyBelow 15	-92%	-93%	-90%	-91%
buyBelow 20	-92%	-93%	-90%	-91%
buyBelow 25	-93%	-90%	-90%	-91%
buyBelow 35	-90%	-90%	-91%	-90%

Hover a cell for trade count and drawdown. “·” = invalid combination (fast ≥ slow).

Year by year

Year	2018	2019	2020	2021	2022	2023	2024	2025	2026
Return	-90%	-6%	-20%	75%	-40%	33%	22%	-36%	-12%
Max DD	92%	51%	56%	33%	70%	23%	35%	56%	47%
Trades	6	7	5	8	8	6	9	7	5

Recent closed trades 6 closed trades — showing the last 6

Entered	Entry	Exited	Exit	Held	Size	P&L (USDT)	Return
2018-10-06	228.47	2018-11-08	218.95	33 bars	2,099.85	-91.55	-4.4%
2018-07-16	450.01	2018-09-23	240.89	69 bars	3,930.66	-1,830.81	-46.6%
2018-06-15	519.56	2018-07-10	471.49	25 bars	4,340.04	-409.38	-9.4%
2018-05-14	729.44	2018-06-09	598.99	26 bars	5,295.84	-955.8	-18.1%
2018-02-24	852.02	2018-04-14	494.44	49 bars	9,143.98	-3,848.14	-42.1%
2018-01-19	993.8	2018-02-19	910.54	31 bars	10,000	-856.02	-8.6%

Prices include slippage; size is what was actually committed to that trade including fees.

Assumptions

Period	2018-01-01 → 2026-09-23
Parameters	{"k":14,"d":3,"smoothK":1,"buyBelow":25}
Rolling test	365 bars × 95 start dates
Input hash	9dd31b7ace0b21a4

Daily candlesGold (PAXG) · 2214 bars · 2020-09-01 → 2026-09-23

Total return

20.4%

10,000 → 12,045

vs buy & hold

-98.1%

over the same period 118.6%

Max drawdown

21.8%

10,000 → 9,257

Longest underwater

1007

1007 days · 97% of the period

Settings that beat it

0 / 16

of 16 parameter settings tested

Win rate

67%

95% CI 53%–79% · n=46

A 0% risk of ruin here is a property of the test, not a safety rating. These runs are long-only spot with no borrowed money, so there is no margin call and nothing can force the position closed. The account cannot be wiped out — it gets stuck holding the asset instead. Capital deployed (1×) and max drawdown (21.8%) are the numbers that carry the risk on this page. The same rules run on margin would be a different measurement, and this figure would not stay at zero.

Daily candles

account equitybuy & holddashed = starting capital

93 fills. Signals are taken on the close and filled at the next open.

Timeframe

Everything above uses the daily row. These are the same rules and the same parameters on a different candle size.

Timeframe	Return	Buy & hold	vs B&H	Beat it	Trades
4H	-45%	119%	-163%	no	241
1D ←	20%	119%	-98%	no	46
1W	38%	123%	-85%	no	6

Outcome distribution

A single return is one chosen start date. These are 62 runs of the same rules with the start shifted forward 30 days at a time.

Worst	p10	p25	Median	p75	p90	Best	Losing starts
-9.8%	-5.0%	-1.1%	1.4%	7.7%	16.9%	24.5%	39%

Does it survive its own parameters?

The headline above uses one parameter setting. Here is every setting tested: 16 combinations, median 20.6%, best 33.5%, worst -1.9%. 0 of them beat buy & hold.

A strategy that only works at one setting did not work — it was fitted.

Parameter grid

	k 9	k 14	k 21	k 30
buyBelow 15	12%	34%	26%	20%
buyBelow 20	18%	27%	24%	29%
buyBelow 25	5%	20%	21%	31%
buyBelow 35	14%	27%	21%	-2%

Hover a cell for trade count and drawdown. “·” = invalid combination (fast ≥ slow).

Year by year

Year	2021	2022	2023	2024	2025	2026
Return	-5%	-1%	1%	11%	14%	-11%
Max DD	11%	17%	10%	6%	6%	22%
Trades	6	6	8	7	8	5

Recent closed trades 46 closed trades — showing the last 40

Entered	Entry	Exited	Exit	Held	Size	P&L (USDT)	Return
2026-07-15	4,050.28	2026-08-10	4,327.26	26 bars	11,520.71	+763.23	+6.6%
2026-05-19	4,579.71	2026-07-07	4,149.94	49 bars	12,739.24	-1,218.53	-9.6%
2026-05-01	4,620.31	2026-05-11	4,684.85	10 bars	12,588.9	+150.34	+1.2%
2026-03-07	5,185.03	2026-04-04	4,646.59	28 bars	14,075.82	-1,486.92	-10.6%
2026-02-03	4,796.77	2026-02-16	5,022.35	13 bars	13,470.51	+605.31	+4.5%
2026-01-02	4,365.02	2026-01-14	4,602.67	12 bars	12,800.58	+669.94	+5.2%
2025-11-19	4,071.03	2025-12-01	4,235.97	12 bars	12,326.79	+473.79	+3.8%
2025-10-24	4,119.98	2025-11-13	4,176.07	20 bars	12,185.56	+141.22	+1.2%
2025-08-19	3,332.63	2025-08-29	3,414.1	10 bars	11,918.57	+266.99	+2.2%
2025-07-30	3,336.96	2025-08-10	3,381.93	11 bars	11,783.63	+134.94	+1.1%
2025-06-21	3,396.39	2025-07-15	3,347.55	24 bars	11,979.49	-195.86	-1.6%
2025-04-29	3,339.67	2025-05-26	3,345.98	27 bars	11,980.85	-1.36	-0.0%
2025-03-28	3,060.53	2025-04-02	3,130.43	5 bars	11,736.76	+244.09	+2.1%
2025-03-02	2,856.43	2025-03-15	2,994.5	13 bars	11,218	+518.76	+4.6%
2024-12-02	2,656.33	2025-01-13	2,696.65	42 bars	11,072.38	+145.62	+1.3%
2024-11-08	2,708.35	2024-11-25	2,728.64	17 bars	11,012.08	+60.3	+0.5%
2024-10-11	2,646.32	2024-10-22	2,733.63	11 bars	10,681.71	+330.37	+3.1%
2024-09-03	2,498.25	2024-09-15	2,575.71	12 bars	10,381.2	+300.5	+2.9%
2024-07-27	2,388.19	2024-08-19	2,503.75	23 bars	9,921.91	+459.29	+4.6%
2024-05-26	2,347.17	2024-07-08	2,353.82	43 bars	9,913.69	+8.22	+0.1%
2024-04-26	2,328.16	2024-05-17	2,360.82	21 bars	9,796.13	+117.56	+1.2%
2024-01-03	2,034.02	2024-02-26	2,007	54 bars	9,947.89	-151.76	-1.5%
2023-12-08	2,019.01	2023-12-21	2,009.99	13 bars	10,012.51	-64.62	-0.7%
2023-11-10	1,942.97	2023-11-19	1,960.02	9 bars	9,945.29	+67.22	+0.7%
2023-10-01	1,868.93	2023-10-16	1,915.04	15 bars	9,725.27	+220.02	+2.3%
2023-09-08	1,908.95	2023-09-21	1,920.04	13 bars	9,688.48	+36.79	+0.4%
2023-08-05	1,944.97	2023-08-26	1,901.05	21 bars	9,932.18	-243.69	-2.5%
2023-04-21	2,007	2023-07-14	1,939.03	84 bars	10,300.93	-368.76	-3.6%
2023-03-10	1,809.9	2023-03-14	1,921.04	4 bars	9,724.44	+576.49	+5.9%
2023-02-07	1,868.93	2023-03-06	1,845.08	27 bars	9,869.9	-145.46	-1.5%
2022-10-17	1,641.82	2022-11-07	1,663.17	21 bars	9,762.72	+107.18	+1.1%
2022-08-20	1,739.87	2022-10-06	1,709.14	47 bars	9,958.11	-195.4	-2.0%
2022-06-16	1,838.92	2022-08-01	1,762.12	46 bars	10,412.93	-454.82	-4.4%
2022-04-25	1,935.97	2022-06-13	1,883.06	49 bars	10,726.95	-314.01	-2.9%
2022-02-28	1,917.96	2022-04-19	1,979.01	50 bars	10,416.84	+310.11	+3.0%
2022-01-30	1,798.9	2022-02-13	1,876.06	14 bars	10,008.39	+408.45	+4.1%
2022-01-08	1,805.9	2022-01-22	1,842.08	14 bars	9,831.48	+176.91	+1.8%
2021-11-26	1,796.9	2021-12-26	1,816.09	30 bars	9,747.05	+84.43	+0.9%
2021-09-10	1,796.9	2021-11-08	1,816.09	59 bars	9,663.35	+83.71	+0.9%
2021-07-24	1,813.89	2021-08-23	1,780.7	30 bars	9,863.15	-199.8	-2.0%

Prices include slippage; size is what was actually committed to that trade including fees.

Assumptions

Period	2020-09-01 → 2026-09-23
Parameters	{"k":14,"d":3,"smoothK":1,"buyBelow":25}
Rolling test	365 bars × 62 start dates
Input hash	855769d5e2fa326b

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