File Includes: Indicator - TurboStochasticsSlow
Category: Indicator > Oscillators
This is Stochastic Slow indicator smoothed by linear regression. A LinearRegression projected into the future or into the past is used to excite the movement of the stochastic lines while smoothing them. Linear regression is a statistical tool used to predict future values from past values. In the case of security prices, it is commonly used to determine when prices are overextended. A Linear Regression trendline uses the least squares method to plot a straight line through prices so as to minimize the distances between the prices and the resulting trendline.
The Stochastic Oscillator is displayed as two lines. The main line is called "%K." The second line, called "%D," is a moving average of %K.
There are several ways to interpret a Stochastic Oscillator. Three popular methods include:
1.Buy when the Oscillator (either %K or %D) falls below a specific level (e.g., 20) and then rises above that level. Sell when the Oscillator rises above a specific level (e.g., 80) and then falls below that level.
2.Buy when the %K line rises above the %D line and sell when the %K line falls below the %D line.
3.Look for divergences. For example, where prices are making a series of new highs and the Stochastic Oscillator is failing to surpass its previous highs.
KLen - SlowK length
DLen - SlowD length
Regress - number of bars to calculate regression
TurboVal - TurboVal is a positive or negative value by which you project the regression. Positive for Past and negative for Future.
VALUE1 = SLOWK(KLEN);
VALUE2 = SLOWD(DLEN);
VALUE3 = LINEARREGVALUE(VALUE1,REGRESS,TURBOVAL);
VALUE4 = LINEARREGVALUE(VALUE2,REGRESS,TURBOVAL);