Stochastic Full Study

By Samantha Baltodano

TL;DR:

The Stochastic Full Study is a generalized version of the Stochastic Fast and Slow Studies, so the Stochastic Full value may be the same as either of those oscillators if you choose a 1 or 3-day period for your moving average. You can choose a smoothing period that best meets your investment needs.

What Is the Stochastic Full Study?

The Stochastic Full study is a generalized version of the Stochastic Fast and the Stochastic Slow oscillators. These three oscillators are all based on the observation that in an uptrending market, prices tend to close near the upper end of the price range. In downtrends, closing prices are often seen approaching the lower end.

How Do You Calculate the Stochastic Full?

The calculation for the Stochastic Full is similar to those for the Stochastic Fast and the Stochastic Slow studies. 

The first value calculated is %K: 

%K = (C - L14 / H14 - L14) * 100

where:

C = the most recent close price

L14 = The lowest price traded of the 14 previous trading sessions

H14 = The highest price traded during the sam 14-day period

%K = The current value of the fast stochastic indicator

The first main plot, FullK, is created by smoothing this value with a moving average of choice.

The other plot, FullD, is a moving average of FullK over a chosen period. 

Both lines oscillate in the range from 0 to 100.

The Stochastic Full oscillator can act as both the Stochastic Fast and the Stochastic Slow. Setting the moving average period to 1 will eliminate the slowing effect of the first moving average, so the formula is identical to the Fast Stochastic. 

Setting the period to 3 will transform the oscillator into the Stochastic Slow. You can also use any custom slowing period.

Buy and Sell Triggers

The buy and sell signals for this strategy are based on the Stochastic Oscillator strategy.

The analysis method is the same as in other oscillators: the crossovers of main plots with overbought/oversold levels are normally looked for.

Summary

• Because this is an oscillator study, it is based on the observation that in an uptrending market, prices tend to close near the upper end of the price range. In downtrends, closing prices are often seen approaching the lower end.
• With the Stochastic Full formula, you choose the smoothing period. As a result, the Stochastic Full value can be identical to the Fast Stochastic if you choose a smoothing period of 1. It can also be identical to the Slow Stochastic if you choose a smoothing period of 3. That said, there’s also a lot of freedom within this strategy and you can choose any number of days that meets your investment needs.

Stochastic Full is just one of many studies that Archaide automates. For a full list of strategies and studies available click here.

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