The Stochastic Oscillator is a technical indicator that measures whether an asset is overbought or oversold. It was developed by George Lane in the 1950s and is based on the observation that high prices tend to close near the top of a given range, while low prices tend to close near the bottom.

The Stochastic Oscillator is calculated using the closing price of an asset over a period of time, typically 14 days. The formula is:

%K = (Current closing price - Lowest closing price over n periods) / (Highest closing price over n periods - Lowest closing price over n periods) x 100

%D = 3-day moving average of %K

Where n is the number of periods used for calculation.

The output of the Stochastic Oscillator is a range-bound indicator that fluctuates between 0 and 100. A reading above 80 typically indicates that the asset is overbought and due for a price correction, while a reading below 20 indicates oversold conditions. Traders can also use the crossing of the %K and %D lines as a signal for buying or selling an asset.

The Stochastic Oscillator is commonly used in conjunction with other technical indicators to confirm price movements and to identify potential trends or trading opportunities.