Calculation: DV Super Smoothed Double Stochastic Oscillator
Hi all, Corey Rittenhouse of Catallactic Analysis has been kind enough to test out some strategy variations on the DV Stochastic using the S&P500. The combo strategy is very interesting. I forwarded him an example spreadsheet for the exact calculation of the indicator to post on his site. http://www.catallacticanalysis.com/strategytests/differentstrategyvariationsDVSSDStochastic.php
To calculate the double stochastic oscillator take the following steps:
1) take the stochastic of the last 10 days including high, low, and close data calculated as (today’s close- min(last 10 days HLC))/(max(last 10 days HLC)-min(last 10 days HLC))
2) take the stochastic of the number calculated in step 1, in this case (stochastic-min(stochastic last 10 days))/(max(stochastic last 10 days)-min(stochastic last 10 days))
3) take the 3 period (day) average of this result for the first smoothing
4) take .85 x the first smoothed value + .15 x the previous day’s smoothed value for to get the final result
The resulting stochastic is smooth and very responsive to the cycles that occur in the S&P500. Good luck!