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Title: A Stochastic Analysis Thread Post by: myself on December 18, 2012, 01:38:31 PM Since there was a request for this thread i go for it
this is a oscillator and you should know what that means ( https://bitcointalk.org/index.php?topic=131184.0 ) sell on top X below the line, buy on bottom X above the line some copy paste formulas Quote %K = (Current Close - Lowest Low)/(Highest High - Lowest Low) * 100 %D = 3-day SMA of %K Lowest Low = lowest low for the look-back period Highest High = highest high for the look-back period %K is multiplied by 100 to move the decimal point two places Quote Fast %K = %K basic calculation Fast %D = 3-period SMA of Fast %K Quote Slow %K = Fast %K smoothed with 3-period SMA the most used stochastic is the Slow version and the normal version is SC come under name of FastSlow %D = 3-period SMA of Slow %K when you want to use SS ? mostly on small periods of time, why ? because FS go nuts http://yfrog.com/obaevmp http://a.yfrog.com/img875/9695/aevm.th.png (http://twitter.yfrog.com/obaevmp) in larger periods of time FS is more sensible because of the way is calculated so is "safer to use it" http://yfrog.com/h81m6wp http://a.yfrog.com/img620/156/1m6w.th.png (http://twitter.yfrog.com/h81m6wp) how to make FS more "friendly" ? well instead of last price from the bar use AVG OHLC and instead of SMA use Weighted MA this reduce the number of signals you get, this changes leave the FS on a middle ground between default FS and default SS the above chart with altered FS http://yfrog.com/od8iskp http://a.yfrog.com/img877/4613/8isk.th.png (http://twitter.yfrog.com/od8iskp) Stochastic RSI this is a oscillator based on other oscillator copy paste formula Quote StochRSI = (RSI - Lowest Low RSI) / (Highest High RSI - Lowest Low RSI) what this means ? in plain words it takes RSI past values and compare them to actual value making this oscillator to be placed on momentum category, so it goes to top and bottom very fast, when you look at StochRSi u dont look at price chart you look at RSI itself Does one buy/sell based on this ? nope so what's the point of this ? the slope of this indicator give information about changes in the RSI when to use this ? on daily and above charts so you can do come front running for the rsi example on a 7d chart, rsi is flat but StochRSI point down so is likely to see RSI going down http://yfrog.com/kjrbntp http://a.yfrog.com/img877/4613/8isk.th.png (http://twitter.yfrog.com/od8iskp) |
