Double Smoothed Stochastic: Calculation and Input Parameters
Summary
The document describes Double Smoothed Stochastic (DSS), a stochastic indicator that applies smoothing in two stages and produces a separate signal line. Its inputs are a calculation period, an EMA period, a signal period, and overbought and oversold levels. The description gives the relationships used to calculate the indicator: price position within a recent high-low range is normalized, then smoothed recursively, with the signal line calculated as an exponential moving average of DSS.
The document explains the calculation rather than presenting a trading rule, empirical results, or a backtest. It does not specify how to interpret crossings or threshold levels, nor does it discuss parameter selection, market suitability, or performance limitations. Readers would need implementation details beyond the formulas shown to reproduce the indicator fully, including how prior values are initialized and how edge cases such as a zero range are handled.
Key ideas
- DSS smooths a stochastic measure in two stages.
- Its calculation uses recent highs, lows, and closes to locate price within a range.
- The indicator has a recursively smoothed value and an EMA signal line.
- Inputs include lookback and smoothing periods plus overbought and oversold levels.
- The document provides formulas but no tested trading signals or performance evidence.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.