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  #1 (permalink)  
Old 06-10-2007, 10:14 AM
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Stochastic Oscillator

I tryed to collect everything about one indicator: Stochastic Oscillator.

"Technical Analysis from A to Z":

Code:
Overview

Sto.chas.tic (sto kas'tik) adj. 2. Math. designating a process 
having an infinite progression of jointly 
distributed random variables.
--- Webster's New World Dictionary

The Stochastic Oscillator compares where 
a security's price closed relative to its 
price range over a given time period.
Code:
Interpretation

The Stochastic Oscillator is displayed 
as two lines. The main line is called "%K." 
The second line, called "%D," is a 
moving average of %K. The %K line is 
usually displayed as a solid line and 
the %D line is usually displayed as 
a dotted line.

There are several ways to interpret 
a Stochastic Oscillator. Three popular methods include:

Buy when the Oscillator (either %K or %D) 
falls below a specific level (e.g., 20) and 
then rises above that level. Sell when 
the Oscillator rises above a specific level 
(e.g., 80) and then falls below that level.

Buy when the %K line rises above 
the %D line and sell when the %K line 
falls below the %D line.

Look for divergences. For example, 
where prices are making a series of new highs 
and the Stochastic Oscillator is failing to surpass 
its previous highs.
Code:
Calculation

The Stochastic Oscillator has four variables:

%K Periods.

This is the number of time periods 
used in the stochastic calculation.

%K Slowing Periods.

This value controls the internal smoothing of %K. 
A value of 1 is considered a fast stochastic; 
a value of 3 is considered a slow stochastic.

%D Periods.

This is the number of time periods used 
when calculating a moving average of %K. 
The moving average is called "%D" and is 
usually displayed as a dotted line on 
top of %K.

%D Method.

The method (i.e., Exponential, 
Simple, Time Series, Triangular, Variable, 
or Weighted) that is used to calculate %D.

The formula for %K is:

Stoch_calc.jpg


For example, to calculate a 10-day %K, 
first find the security's highest-high and 
lowest-low over the last 10 days. 
As an example, let's assume that during 
the last 10 days the highest-high was 46 and 
the lowest-low was 38--a range of 8 points. 
If today's closing price was 41, 
%K would be calculated as:

Stochcalc1.jpg


The 37.5% in this example shows 
that today's close was at the level of 37.5% 
relative to the security's trading range over 
the last 10 days. If today's close was 42, 
the Stochastic Oscillator would be 50%. 
This would mean that that the security 
closed today at 50%, or the mid-point, 
of its 10-day trading range.

The above example used a 
%K Slowing Period of 1-day (no slowing). 
If you use a value greater than one, 
you average the highest-high and 
the lowest-low over the number of 
%K Slowing Periods before performing 
the division.

A moving average of %K is then 
calculated using the number of time 
periods specified in the %D Periods. 
This moving average is called %D.

The Stochastic Oscillator always ranges between 0% and 100%. A reading of 0% shows that the security's close was the lowest price that the security has traded during the preceding x-time periods. A reading of 100% shows that the security's close was the highest price that the security has traded during the preceding x-time periods.
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Old 06-10-2007, 11:09 AM
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Divergence using Stochastic: some general information about it was collected on this thread http://www.forex-tsd.com/indicators-...indicator.html and some of them are on this post.

painting the past: Stochastic is not paiting the past. But we need in some systems for this indicator to be painted the past. Read some exotic explanation/request ASCTrend system

how to understand the price movement using 3 Stochastic indicators:
- template attached (M5 timeframe). It was taken from asctrend M5 informational template from elite section here.
- some other informational templates about price movement understanding are here.

Multi Timeframe Stochastic:
- MTF stochastic momentum indicator is here;
- MTF Stochastic is here, and here, and here, and here, and here, and here, and here (#MTF Stochastic v. 2.0);
- Stochastic_Standard_4TF_cja updated indicator: this post.

Stochastic with alert is here, #MTF_Stochastic1.1 with alert is here; #MTF Stochastic v2.0 with alert is here; alert on crossing is here, stochastic witrh alert EA is here, stochastic with alert thread.

- Many Stochastic indicators in one page collected: is here.

StochHistogram indicator is here.
- StochHistogram indicators with alert (2 indicators) are on this page.

- Color Stochastic indicator is here and here and here.

- StochCandles_80_20 indicator is here.
Attached Files
File Type: zip stoch_price.zip (1.8 KB, 1020 views)

Last edited by newdigital; 08-19-2008 at 07:04 PM. Reason: Stochastic_Standard_4TF_cja link added
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Old 06-10-2007, 11:19 AM
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Stochastic Momentum Indicator (Index):
- original thread is here;
- fixed indicator is here.

Stochastic filter indicator is here.

Stochastic Bar type MTF indicators: original thread.

On Chart Stochastic: indicator on the main window.

Stochastic tape indicator is on this page.

Stoch Signal: thread with good indicator by cja.

AllStochastics indicator: good MTF indicator developed by Igorad.

Blau's double smoothed stochastic is on this post.

Stochastic placed in chart window is on this post.

Last edited by newdigital; 08-19-2008 at 09:23 AM. Reason: Stochastic placed in chart window
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Old 06-10-2007, 11:54 AM
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EAs:
- Stoch EA is on this thread;
- Stochastic EA is here;
- Stochastic v1 EA is here;
- stoch_21 EA is here;
- Stochastic Sample EA is here;
- Stoch-Hellkas EA is here.
-StepStochCross EA. Elite section thread is here.
- Advice EA-Stoc Guru: public thread.
- Stochastic with RSI filter - StochEA: public thread.
- StochEA v0.1: original thread.
- StoIK EA - Stoch\I-Trend: thread with few versions of the EA using i-trend indicator.

Trading systems based on Stochastic:
- A simple idea trading system is here;
- Stoch trading system is here and EA is here;
- ZerolagStochs system is here;
- Stochastic in BrainSystem: the thread is here and here;
- Cycles witch stochastic: elite section thread.

All John Ehlers Indicators is here (including Fisher Transform over Stochastic Oscillator, and so on).

Reverse Divergence using Stochastic indicator is here.

Stoch Signal: thread about how Stochastic's working with some good indicators is here.

Overbought/oversold condition with Stochastic: small thread with good indicators is here.

Last edited by newdigital; 01-23-2009 at 12:15 PM. Reason: Stoch EA
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Old 06-10-2007, 11:57 AM
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Thanks newdigital. Been looking at this for decads. A very complete summary for me. Again, big thank you for you.

Regards

David
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Old 06-10-2007, 01:04 PM
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thanks alot
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Old 06-10-2007, 01:10 PM
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Great topic, indeed. The stochastic indicator is presently one of my favorites It's just that it takes a while to get a real understanding of what it can do for you. For me the lights went on once I understood that you should not just use it as an overbought/-sold indicator, but also as a momentum indicator, where you take certain levels of K and/or D as indications of a trend being strong/weak, such as when being above/below 80/20.

Another great article about this indicator can be found at http://stockcharts.com/school/doku.p...tic_oscillator
Especially for Slow versus Fast versus Full Stochastics.

This following phrase of the first post had me wondering for a moment:

Quote:
The Stochastic Oscillator always ranges between 0% and 100%. A reading of 0% shows that the security's close was the lowest price that the security has traded during the preceding x-time periods. A reading of 100% shows that the security's close was the highest price that the security has traded during the preceding x-time periods.
Since I use slow stochastics, this puzzled me as I didn't find the 100% and 0% values as the quote suggests. In fact it applies to fast stochastics, and only occasionally occurs on slow stochastics.

Attached is a chart example that should make this point immediately clear. Upper stoch is fast, lower stoch is slow.

Take care!
Attached Images
File Type: gif stoch-slow-fast_example_b.gif (14.8 KB, 11348 views)
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Old 07-02-2007, 08:54 PM
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I have got this picture from another topic:How to use Support and Resistance Effectively, it is called TTM Stochastic and it looks very smooth and intersting.Does anybody have the formula of TTM Stoch indicator?



Shot at 2007-07-02
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Old 07-03-2007, 02:41 AM
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ND

Thanks for the nice work. Wish there is something for all indicators....

ET
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Old 07-03-2007, 09:13 AM
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hi mystified, i only have this one. hopely this is what are you looking for.

@ND
thx a lot ND

i think i have seen stoch with fibo line here before.did someone have it.

one more thing. what is the best setting for stoch.
i usualy use 14,3.3 for my stoch setting. does anyone use different setting.


regards
HP
Attached Files
File Type: mq4 TTMStoch.mq4 (4.9 KB, 943 views)
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