Using Moving Averages as Inputs to a Stochastic Oscillator

Summary

This brief description presents a stochastic oscillator calculated from moving averages rather than directly from price. The change is offered as a way to filter some of the noise that can occur when the oscillator is applied to raw prices. It lists simple, exponential, smoothed, and linear weighted moving averages as available inputs. The document does not explain the calculation formula or compare the average types, so it offers a concept rather than implementation guidance.

For signals, it suggests watching the indicator’s color changes or crosses of user-selected levels. No market, timeframe, parameter settings, examples, or performance evidence are provided. The proposed smoothing may alter signal timing as well as reduce noise, and the description does not assess that tradeoff. Traders would need to define and test the rules for their own instrument and data before relying on the signals.

Key ideas

• The oscillator can use a moving average as its input instead of raw prices.
• The available average types are simple, exponential, smoothed, and linear weighted.
• The stated motivation is to reduce noise in the oscillator.
• Color changes and crosses of custom levels are suggested as possible signals.

Tags

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