The stochastic oscillator was developed in the late 1950s by George Lane. As designed by Lane, the stochastic oscillator presents the location of the closing price of a stock in relation to the high and low prices of the stock over a period of time, typically a 14-day period. Stochastic indicators are technical analysis tools that are used to identify potential trend reversal points in financial markets. They are called "stochastic" because they are based on the concept of "stochasticity," which refers to the idea that a random process can be described by a certain probability distribution. The basic idea behind stochastic indicators is to compare the closing price of a security to its price range over a given period of time. For example, a 14-day stochastic indicator would compare the closing price of a security on a particular day to its high and low prices over the previous 14 days.  There are two main types of stochastic indicators: fast and slow. Fast stochastic indicators are more sensitive to price changes and are therefore more prone to generating false signals. Slow stochastic indicators are less sensitive to price changes and are therefore less prone to generating false signals, but they also tend to be less accurate at identifying trend reversal points. Stochastic indicators are typically plotted on a separate chart below the price chart of a security, and they are typically plotted as two lines: the %K line and the %D line. The %K line represents the current level of the stochastic indicator, while the %D line is a moving average of the %K line. Traders and investors often use stochastic indicators in conjunction with other technical analysis tools, such as moving averages and trend lines, to help confirm potential trend reversal points and to help identify entry and exit points for trades. It is important to note, however, that like all technical analysis tools, stochastic indicators are not perfect and should be used as part of a larger, more comprehensive trading strategy. The Stochastic indicator for the Jackrabbit suite and modulus framework supports differential timeframe analysis and confirmational bias. Timeframes supported: 1 Second, 5 Seconds, 15 Seconds, 30 Seconds, 1 Minute, 5 Minutes, 15 Minutes, 30 Minutes, 45 Minutes, 1 Hour, 2 Hours, 3 Hours, 4 Hours, 6 Hours, 8 Hours, 12 Hours, 1 Day, and any custom timeframe TradingView supports. This is an updated view of Stochastic and supports traditional overbought/sold boundaries and cross over regions. There is also an added smoothing ability to enhanced analysis. The main indicatior and the confirmational indicator can both be
individually tuned for the length and smoothing, with many different moving
average types:
The Jackrabbit modulus framework is a plug in play paradigm built to operate through TradingView's indicator on indicatior (IoI) functionality. As such, this script receives a signal line from the previous script in the IoI chain, and evaluates the buy/sell signals appropriate to the current analysis. The results are either combined with the signal line, or used as confirmation to the signal line. A new signal line is generated for the next script in the link. Buy/Sell alerts are produced, but this script is not designed or meant to function outside my framework. By default, the signal line is visible and the charts are turned off. Signal line visibility is controlled by the Style tab, and the charts display is controlled by the indicator settings tab. This script is part of a subscription along with 20 other scripts that make up Jackrabbit TV. For more information, please visit my patreon site. |
