Slow Stochastic: Smoothed K and D Lines and Threshold Settings
Summary
This document describes a slow stochastic oscillator displayed in a separate chart window. It first calculates a fast stochastic value from the close's position within the recent high-low range, then applies a simple moving average over the D period. A second simple moving average, using the slowing period, produces the further-smoothed series. If the high-low range is zero, the fast stochastic is assigned a neutral value of 50.
The listed inputs are the K lookback period, D averaging period, slowing period, and overbought and oversold levels. These settings define the calculation and reference thresholds, but the description does not specify how to trade oscillator crossings or interpret divergences. It offers no market examples, parameter guidance, backtests, or evidence that the indicator predicts returns. The oscillator is therefore presented as a calculation and configurable display, not as a tested trading strategy.
Key ideas
- The fast stochastic measures the close's location within a lookback high-low range.
- A simple moving average over the D period smooths the fast stochastic.
- A second moving average controlled by the slowing period further smooths the series.
- A zero-width high-low range is assigned a value of 50.
- K, D, slowing, overbought, and oversold settings control the indicator calculation and reference levels.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.