DiNapoli Preferred Stochastic Smoothing and Calculation

Summary

This document explains a smoothed stochastic oscillator associated with Joe DiNapoli. It identifies four configurable inputs: the lookback for the %K calculation, the period used to smooth %D, the slowing period, and the price series used as input. The raw fast %K measures the close's position between the highest and lowest prices over the %K lookback.

The indicator then recursively smooths the fast %K using the prior K value and the slowing period, and smooths K into D using the prior D value and the %D period. This distinguishes its calculation from a basic stochastic presentation. The document gives formulas but no trading rules, parameter recommendations, tests, or performance evidence. It also does not explain initialization of prior values or behavior when the high-low range is zero, so those implementation details require separate decisions.

Key ideas

• Fast %K locates the close within the recent high-low range.
• The K line is recursively smoothed using the prior K value and the slowing period.
• The D line smooths K recursively using its own period and prior value.
• The indicator exposes periods, slowing, and applied price as inputs.
• No entry rules, test results, or initialization guidance are provided.

Tags

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