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Stochastics can be either fast or slow. This speed doesn’t relate to the amount of time periods that it covers, but how swiftly it’ll respond to a change in direction from bullish to bearish or vice versa. The fast stochastic is more respondent, like a fast vehicle. This is the mathematical formula for fast stochastics:

%K = 100((C – L14)/(H14 – L14))

C = last final price, L14 = lowest low during the past 14 periods, H14 = highest high during last fourteen periods. Stochastic based trading systems usually take a signal from the crossover of the 2 lines %K and %D. But some traders find it responds to changes in movements in prices too quickly, leading to a premature signal. Therefore slow stochastics were developed. The slow stochastic indicator applies a three period moving average to the %K of the original equation. The new %D is then a three period moving average of the new slow %K. Obviously this is going to reduce sensitivity to minor fluctuations in price. Part of the fact that stochastics are sometimes ignored by day traders is they focus on the fast stochastic while in truth the slow stochastic would serve them miles better.