I thought for this post I would just continue on with the theme of testing trading strategies based on signals from some of the classic “technical indicators” that many traders incorporate into their decision making; the last post dealt with Bollinger Bands and for this one I thought I’d go for a **Stochastic Oscillator Trading Strategy Backtest in Python**.

Let’s start with what the Stochastic Oscillator actually is; Investopedia describes it as follows:

“What is the ‘Stochastic Oscillator’

The stochastic oscillator is a momentum indicator comparing the closing price of a security to the range of its prices over a certain period of time. The sensitivity of the oscillator to market movements is reducible by adjusting that time period or by taking a moving average of the result.