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Pastimes : IQ Chart - Live Discussions with Subscribers and Staff

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To: realtimeuser who wrote (7)10/2/2001 7:20:54 PM
From: John Busby   of 24
 
Slow vs. Fast Stochastics

realtimeuser --

IQ Chart uses slow stochastics. (But see the bottom of this message for a tip.) From our education section:

The stochastics indicator is plotted as two lines, %K and %D. The range of the Stochastics is between 0 and 100. With a price range of ten to twenty, ten would be given a 0 designation, fifteen would be at 50, and a price of twenty would be at the 100th percentile. The values of the stochastics calculations are dependent on the parameters given to %K and %D.

There are two types of stochastics: fast stochastics and slow stochastics. When calculating fast stochastics, the raw value of %K is the point at which the current price lies within the historical price range of its given period, and the value of %D is the moving average of %K over a given number of periods.

When calculating slow stochastics, the value of %K slow is the %D-period moving average of the point at which the current price lies within the historical price range of its given period (or raw %K), and the value of %D slow is the moving average of the %K slow over a given number of periods.

IQ Chart and IQC.COM use slow stochastics, which by being smoothed, tend to exhibit less market noise.


However, there is a way to create a "fast stochastics" environment by setting the %D parameter to 1. (Note: you'll only get the %K parameter at that point, but it will be the fast calculation.)

To set the %D parameter, click "utilities" >> "parameters" and select stochastics from the 1st drop-down menu.

Read more about our stochastics by going to:
iqchart.com

Thanks!
John
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