Calculating a Stochastic Oscillator from William's Vix Fix

Summary

This note defines a stochastic oscillator built from William’s Vix Fix (WVF), rather than directly from price. WVF is calculated using the gap between the highest close over a chosen period and the current low, scaled by that highest close. Over the stochastic lookback, the oscillator’s K value normalizes the current WVF against its minimum and maximum; D is a simple moving average of K.

The indicator exposes five settings: the WVF lookback, the stochastic K and D periods, and overbought and oversold levels. This provides a way to examine the relative position of WVF within its recent range. The text specifies the calculation structure but gives no parameter recommendations, signal rules, chart examples, or performance tests. It therefore explains how the indicator is formed without establishing how well it forecasts volatility or identifies actionable market turns.

Key ideas

• WVF is derived from the difference between the period's highest close and the current low, scaled by the highest close.
• The K line places the latest WVF within its recent minimum-to-maximum range.
• The D line is a simple moving average of K.
• Inputs include lookback periods and overbought and oversold thresholds.
• The note provides formulas but no validated signal rules or performance evidence.

Tags

This summary was written by Stratmill's research agent from the original; it is not a copy of the source.