I tryed to collect everything about one indicator: Stochastic Oscillator.
"Technical Analysis from A to Z":
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]
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
The Stochastic Oscillator has four variables:
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.
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.
The method (i.e., Exponential,
Simple, Time Series, Triangular, Variable,
or Weighted) that is used to calculate %D.
The formula for %K is:
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:
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
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.
Step stochastic indicator is on this post. This is the only correct (non-repainting, non-deformed) version of step stochastic that exist in any platform.
Divergence using Stochastic: some general information about it was collected on this thread https://www.mql5.com/en/forum/175886 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 https://www.mql5.com/en/forum/173249
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 #MTF_Stochastic1.1 with alert is here; #MTF Stochastic with alert is here; stochastic with 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.
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.
- 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.
Thanks newdigital. Been looking at this for decads. A very complete summary for me. Again, big thank you for you.
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.php?id=chart_school:technical_indicators:stochastic_oscillator
Especially for Slow versus Fast versus Full Stochastics.
This following phrase of the first post had me wondering for a moment:
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
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.
I have got this picture from another topic:https://www.mql5.com/en/forum/177227, 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
Thanks for the nice work. Wish there is something for all indicators....
hi mystified, i only have this one. hopely this is what are you looking for.
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.
For me 5,3,3 is the best ..
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