Finance::GeniusTrader::Indicators::STO

Overview

Developed by George C. Lane in the late 1950s, the Stochastic Oscillator is a momentum indicator that shows the location of the current close relative to the high/low range over a set number of periods. Closing levels that are consistently near the top of the range indicate accumulation (buying pressure) and those near the bottom of the range indicate distribution (selling pressure).

Calculation

%K Fast = 100 * ((Last - Lowest Low(n)) / (Highest High(n) - Lowest Low(n))) %D Fast = M-periods SMA of %K Fast

 %K Slow = A-periods SMA of %K Fast
 %D Slow = B-periods SMA of %K Slow

possibly helpful information:

 %K Fast corresponds to STO/1, %D Fast to STO/2, %K Slow to STO/3
 and %D Slow to STO/4

 %K Slow may also be known as the stochastic oscillator
 %D Slow is also known as the signal line

arguments and defaults for STO

STO accepts 7 arguments, the defaults are, in order: 5, 3, 3, 3, {I:Prices HIGH}, {I:Prices LOW}, {I:Prices CLOSE}

 The first argument is the Period n used in the formula above and for
 each of the subsequent SMA periods.

 The second argument is M-periods, the third is A-periods, fourth is B-periods.

By default the data used is price, which can be changed by specifying different indicators. the order is High(n), Low(n), Last in the %K Fast formula above.

Note that Metastock calculates the slowing via a sum of the last M-periods, rather than a SMA. Metastock displays %K Slow and %D Slow.

Examples

Finance::GeniusTrader::Indicators::STO->new() Finance::GeniusTrader::Indicators::STO->new([14, 3, 3, 3])

Links

http://www.stockcharts.com/education/What/IndicatorAnalysis/indic_stochasticOscillator.html http://www.equis.com/free/taaz/stochasticosc.html