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Stochastic Oscillator

Stochastic MomentumStochastic Momentum adds shorter and longer term Stochastic movements on the same chart to indicate relative momentum for short and slightly longer term outlooks. Can be used like a regular Stochastic indicator for overbought / oversold levels, divergence and additionally also the crossing of the shorter (blue) and longer (orange) levels. It is a leading indicator and often signals early moves of momentum, which may or may not translate into the same price movements.
Pine Script™ indicator
by EasyTradingSignals
1
Historical Stochatic (HS) [cI8DH]This indicator calculates historical stochastic (HS). It also includes the standard stoch. HS works similar to the standard stochastic . The difference is that the standard stochastic has a set look-back period, while HS looks as far back as the first bar. This allows identifying ATHs and ATLs (background highlights green and red respectively). Basically, HS shows inverse retracement from ATL to ATH in percentage. This indicator works best on non-range bound indicators such as MACD. As you can see in the chart below, MACD is not useful to compare against periods that price is wildly different. Applying HS on MACD fixes this issue (To achieve the same results, add MACD indicator > change the source to MACD on HS settings > since MACD is a smoothed indicator, smoothing length is set to 1. To get similar smoothing length on the signal as in standard MACD, set %D to 5 smoothed MA which is equivalent to 9 EMA smoothing on standard MACD). Gain/Loss Moving Average (GLMA) is another indicator that can benefit well from HS. GLMA is the simplest and probably the most accurate momentum indicator. But it is not as convenient as RSI since it is not range bound. HS can make it range bound without compromising its accuracy. (To achieve the same results, add GLMA indicator > change the source to GLMA on HS settings > set %K length to 1). Chart below shows HS applied to Accumulation/Distribution Money Flow (ADMF) and compares it against its range bound counter part, ADP. Conclusion: There are different ways of making an indicator normalized or range bound. Some indicators use RSI's approach (positive changes MA / all changes MA) such as MFI, CMF, ADP. This approach is great but the divergence near extremes can sometimes be misleading. HS fixes this problem as long as the indicator is not making a new ATH or ATL . When it does make new ATH or ATL , this indicator gives a warning to avoid using it for detecting divergence. PS: It is a bit geeky to apply HS on other indicators. I will publish some of my indicators with HS and standard stoch built-in. So stay tuned if u r interested in this indicator. Read more here about using stochastic www.tradingview.com(STOCH)
Pine Script™ indicator
by cI8DH
5
Inverse Fisher Transform on STOCHASTIC (modified graphics)Modified the graphic representation of the script from John Ehlers - From California, USA, he is a veteran trader. With 35 years trading experience he has seen it all. John has an engineering background that led to his technical approach to trading ignoring fundamental analysis (with one important exception). John strongly believes in cycles. He’d rather exit a trade when the cycle ends or a new one starts. He uses the MESA principle to make predictions about cycles in the market and trades one hundred percent automatically. In the show John reveals: • What is more appropriate than trading individual stocks • The one thing he relies upon in his approach to the market • The detail surrounding his unique trading style • What important thing underpins the market and gives every trader an edge About INVERSE FISHER TRANSFORM: The purpose of technical indicators is to help with your timing decisions to buy or sell. Hopefully, the signals are clear and unequivocal. However, more often than not your decision to pull the trigger is accompanied by crossing your fingers. Even if you have placed only a few trades you know the drill. In this article I will show you a way to make your oscillator-type indicators make clear black-or-white indication of the time to buy or sell. I will do this by using the Inverse Fisher Transform to alter the Probability Distribution Function (PDF) of your indicators. In the past12 I have noted that the PDF of price and indicators do not have a Gaussian, or Normal, probability distribution. A Gaussian PDF is the familiar bell-shaped curve where the long “tails” mean that wide deviations from the mean occur with relatively low probability. The Fisher Transform can be applied to almost any normalized data set to make the resulting PDF nearly Gaussian, with the result that the turning points are sharply peaked and easy to identify. The Fisher Transform is defined by the equation 1) Whereas the Fisher Transform is expansive, the Inverse Fisher Transform is compressive. The Inverse Fisher Transform is found by solving equation 1 for x in terms of y. The Inverse Fisher Transform is: 2) The transfer response of the Inverse Fisher Transform is shown in Figure 1. If the input falls between –0.5 and +0.5, the output is nearly the same as the input. For larger absolute values (say, larger than 2), the output is compressed to be no larger than unity. The result of using the Inverse Fisher Transform is that the output has a very high probability of being either +1 or –1. This bipolar probability distribution makes the Inverse Fisher Transform ideal for generating an indicator that provides clear buy and sell signals.
Pine Script™ indicator
by hard6out
1