Stochastic

Description

The Stochastic Overbought/Oversold strategy is based on the Stochastic Full technical indicator. The Stochastic Full study is an oscillator based on the observation that as prices increase, closing prices tend to be closer to the upper end of the price range. In downtrends, the closing price tends to be near the lower end of the range. The strategy adds a simulated Buy order when the Stochastic Full crosses above the oversold level and a simulated Sell order when it crosses below the overbought level.

Input Parameters

Parameter Description
price h Type of price whose highest value is found on the specified period.
price l Type of price whose lowest value is found on the specified period.
price c The latest closing price.
k period Number of bars used to calculate the FastK.
slowing period The period used for averaging the Stochastic Fast.
over bought Defines the overbought level.
over sold Defines the oversold level.
average type The type of moving average to be used in calculations: simple, exponential, weighted, Wilder's, or Hull.

Backtesting is the evaluation of a particular trading strategy using historical data. Results presented are hypothetical, and there is no guarantee that the same strategy implemented today would produce similar results.

Technical analysis is not recommended as a sole means of investment research.

For educational purposes only. Not a recommendation of a specific security or investment strategy.

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