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!

1. September 11, 2009 7:04 pm

Very cool David, can you tell me if HLC is referring to (H+L+C)/3 ? Also not sure where DV is derived – looking for (C/((H+L)/2). And are there two lines in the final indicator – from steps 2 and 4? Thanks!

September 11, 2009 8:22 pm

hi, don’t confuse this with the DV, that is just a branding thing. Essentially take the stochastic of all three rows of data going back 10 days (H, L, and C). Then take the 10-day stochastic of this, and then smooth it twice according to instructions

cheers
dv

September 13, 2009 7:06 am

Hello.
I didn’t quite understand the functions of calculation.
Can you explain it with more details?

September 13, 2009 6:00 pm

hi please send me an email and i can send you a spreadsheet example
dv

September 13, 2009 8:57 pm

How is this used? If you ultimately have just one result (from step 4, identified as the final result), what are you looking for? (Above/below .8/.2?) Or do you retain the result from more than just step 4, presumably to have lines that cross?

September 13, 2009 11:17 pm

hi mike, this can be used just like a normal stochastic, note that the performance was very good just simply buying below .5 and selling above .5. However I would recommend buying below .3 or .2 and selling above .5 most of the position and part of it above .8.

dv

September 14, 2009 8:59 am

Hello. My email is shay.farber@gmail.com
thanks.

November 16, 2009 9:49 pm

Hi,
My E-Mail is pra1968@yahoo.com

April 1, 2010 8:23 am

kindly send me an example of double stoch in excel spreadsheet
thnx