Double Smoothed Stochastic: Construction and Overbought Levels
Summary
The Double Smoothed Stochastic, attributed here to William Blau and Walter Bressert, adapts the stochastic oscillator by applying exponential smoothing twice. The provided calculation first smooths a stochastic reading, rescales that smoothed series within its recent high-low range, and smooths the result again. A further smoothed line serves as a trigger for comparison with the main indicator.
The document interprets readings above 80 as overbought and readings below 20 as oversold, following conventional stochastic usage. It also gives example lookback and smoothing settings, but provides no market, timeframe, testing, or evidence that these thresholds predict reversals. The indicator can describe relative position within a recent range; by itself it does not specify entry, exit, or risk rules. The source includes duplicated explanatory material and unrelated privacy text, which do not add to the trading method.
Key ideas
- The indicator applies exponential smoothing twice to a stochastic-style calculation.
- It rescales a smoothed stochastic series within its recent range before the second smoothing step.
- A separate smoothed trigger line is provided for comparison with the main reading.
- Values above 80 are treated as overbought and values below 20 as oversold.
- The document supplies no performance evidence or complete trading rules.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.