V.4:5 (172-175): How useful are stochastics for trading? by Jack D. Schwager and Norman Strahm
Product Description
How useful are stochastics for trading? by Jack D. Schwager and Norman Strahm
In the current popular trading systems terminology, a stochastic refers to a measure of the placement of the current price within a recent range. If the current price is near the top part of the recent range, the stochastic will be high; if it is near the low end of the range, the stochastic will be low. Specifically, the stochastic can be defined as follows:
S
C L
H-L N
t = -
Ct = current closing price
H = high price during past N days
L = low price during past N days
N = number of days used to calculate the stochastic value
S = the stochastic's value on the Nth day
This definition uses daily price data, but any time interval can be used.
In the current popular trading systems terminology, a stochastic refers to a measure of the placement of the current price within a recent range. If the current price is near the top part of the recent range, the stochastic will be high; if it is near the low end of the range, the stochastic will be low. Specifically, the stochastic can be defined as follows:
S
C L
H-L N
t = -
Ct = current closing price
H = high price during past N days
L = low price during past N days
N = number of days used to calculate the stochastic value
S = the stochastic's value on the Nth day
This definition uses daily price data, but any time interval can be used.
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