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George Lane’s description of his famous indicator: "Stochastic measures the momentum of price.  If you visualize a rocket going up in the air – before it can turn down, it must slow down.
Momentum always changes direction before price.
"As prices move down, the close of the day has a tendency to crowd the lower portion of the daily range. Just before you get to the absolute price low,
The market does not have as much push as it did. 
The closes no longer crowd the bottom of the daily range. Therefore, Stochastic turns up at or before the final price low.

Take what he said and reverse it for when the market is moving higher also.
If you visualize a rocket slamming into the earth, it has slowed down abruptly, before it can turn up, a ton of (money) momentum comes in to take a new one back up.
George passed away in 2004 before the major advent of day traders and the advent of robots trading the markets. He did believe in Fibonacci and the percentages of 0 to 100.

Deluxe Stochastic - StockK

With All Due Respect To The Creator Of Stochastic, George Lane

George Lane had the right idea, get up and trade in the morning & then take a nap and go live. Stochastic is the letters K and D from the alphabet.
George Lane & Stochastic
If you use a out of the box StockK it really leaves alot to be desired, great tool but totally under scripted.
If you use a StockK with RSI, scripted in it, WHY? They are both momentum indicators. Use one or the other.
StockK uses price, high, low, close, for its formula, RSI only uses price, also if you put it in perspective RSI is the same measurement as
any moving average you use on price, as is Fibonacci, there is a study in TOS called Reverse Engineering RSI, try it you will see.
Both have a scale of 0 to 100, and the so called overbought, oversold, there's that 0 to 100 roman numeral decimal thing again, Fibonacci.
 Actually if you go in the formula of StockK, you can make the 0, minus anything you want, and make the 100, into a 1000, it ranges the same.
In the SMI Stochastic Momentum Index study the range is infinite. Is anything ever really overbought or oversold?
Maybe its underbought and undersold. Trade What You See, Not What You Hear.

With Deluxe StockK you have the following.

1. An expanded operating window, it is scripted with a -10 line and a 110 line so it makes the window bigger. It does not alter the formula.
So you can get some definition of movement and your bubble isn't always
disappearing. Leave them on and color them whatever background color you use.

2. It is scripted with a 0 line and a 100 line, the true scale of operation, and your bubble doesn't disappear.

3. It is scripted with a 50 line , if you so such desire one.

4. It is scripted with deluxe factory FullK and FullD color choices, Normal, OverBought, OverSold. What Normal is escapes the imagination.

5. It is scripted with FullK and FullD slope color choices, you choose the colors. You decide what plot you want to use, factory or slope! Or use both. Line and Dots!
Slope coloring helps to count the waves and or cross recross, net sellers, net buyers action.

6. It is scripted with a cross of FullK crossing FullD, with arrows, Learn to watch the slope color change more so then the arrow coming on.
The Hull Crossover script works great as a heads up that something is happening to check the slope on the StockK. Mindful, Mindful, Mindful.

7. It is scripted with a color cloud between FullK, FullD, looking at a StockK with no cloud ruins your brain. With the cloud and the slope FullK, FullD
the action is so defined. So easy to see and check whats going on. To set the colors on the cloud you use the Globals tab in the edit study box.
Use whatever settings you desire. George Lane used 14 K, 14 D, slowing period 3. They seem to work best!

It still has the factory Breakout script, for a Full K or Full D cross of the overbought or oversold, seems useless, so many times FullK and FullD never contact them
and or to many false signals in such a sensitive area and more of a distraction then anything.


Use the factory FullK, FullD, or the FullKSlope, FullDSlope. Same plots, different choice of coloring's.




On the factory Up Signal, Down Signal and FullKCrossUp, FullKCrossDown, you need to use Numerical arrows, up or down.




To set colors on the cloud use the Globals tab in the study edit box.
No the cloud is on all the time, it is the driving force of improving the StockK study.
No there is no cloud for when StockK is above 80 or below 20, you don't need it.
In reality the whole overbought, oversold wording misconstrues the whole study process, it doesn't have to be overbought, oversold.
Watch for a change in the slope color in coordination of a known Fivot and overall bias of price action. Mindful, Mindfulness.





One hour chart, 14 EMA moving average, Three days showing day Fivots, Hull crossover and StockK.
One hour Time Chart is great and alot of people use it, the choice is yours between Time or Range!



WARNING about Range Charts in TOS - Use the 10 Day for Time Interval, any other setting doesn't function correctly. Thats subject to change.

 
60 tick and or points, Range bar Chart, use it as a trigger chart or trade it on its own, a 60 point candle is a $300.00 bill on a single /YM contract.
It traded the day Fivots to the line.



WARNING about Range Charts in TOS - Use the 10 Day for Time Interval, any other setting doesn't function correctly. Thats subject to change. 

Same Chart with EMA Price Cloud - Price Line indicator.




Script For Think Or Swim - Copy & Paste

declare lower;

input over_bought = 80;
input over_sold = 20;
input KPeriod = 10;
input DPeriod = 10;
input slowing_period = 3;
input priceH = high;
input priceL = low;
input priceC = close;
input averageType = AverageType.SIMPLE;
input showBreakoutSignals = {default "No", "On FullK", "On FullD", "On FullK & FullD"};


def lowest_k = Lowest(priceL, KPeriod);
def c1 = priceC - lowest_k;
def c2 = Highest(priceH, KPeriod) - lowest_k;
def FastK = if c2 != 0 then c1 / c2 * 100 else 0;

plot FullK = MovingAverage(averagetype, FastK, slowing_period);
plot FullD = MovingAverage(averageType, FullK, DPeriod);

plot FullKSlope = FullK;
FullKSlope.DefineColor("Up", GetColor(1));
FullKSlope.DefineColor("Down", GetColor(0));
FullKSlope.AssignValueColor(if FullKSlope  > FullKSlope [1] then FullKSlope .color("Up") else FullKSlope .color("Down"));

plot FullDSlope = FullD;
FullDSlope.DefineColor("Up", GetColor(1));
FullDSlope.DefineColor("Down", GetColor(0));
FullDSlope.AssignValueColor(if FullDSlope  > FullDSlope [1] then FullDSlope .color("Up") else FullDSlope .color("Down"));

plot FullKCrossUp = if FullK crosses above FullD then FullD else Double.NaN;
plot FullKCrossDown = if FullK crosses below FullD then FullD else Double.NaN;

plot OverBought = over_bought;
plot OverSold = over_sold;

def upK = FullK crosses above OverSold;
def upD = FullD crosses above OverSold;
def downK = FullK crosses below OverBought;
def downD = FullD crosses below OverBought;

plot UpSignal;
plot DownSignal;
switch (showBreakoutSignals) {
case "No":
    UpSignal = Double.NaN;
    DownSignal = Double.NaN;
case "On FullK":
    UpSignal = if upK then OverSold else Double.NaN;
    DownSignal = if downK then OverBought else Double.NaN;
case "On FullD":
    UpSignal = if upD then OverSold else Double.NaN;
    DownSignal = if downD then OverBought else Double.NaN;
case "On FullK & FullD":
    UpSignal = if upK or upD then OverSold else Double.NaN;
    DownSignal = if downK or downD then OverBought else Double.NaN;
}

AddCloud (FullK, FullD, globalcolor("Bullish"),globalcolor("Bearish"));
DefineGlobalColor("Bullish",color.Green);
DefineGlobalColor("Bearish",color.Red);

UpSignal.setHiding(showBreakoutSignals == showBreakoutSignals."No");
DownSignal.setHiding(showBreakoutSignals == showBreakoutSignals."No");

plot MinusTen = -10;
MinusTen.SetLineWeight(1);
MinusTen.SetDefaultColor(GetColor(0));

plot Zero = 0;
Zero.SetLineWeight(1);
Zero.SetDefaultColor(GetColor(0));

plot Fifty = 50;
Fifty.SetLineWeight(1);
Fifty.SetDefaultColor(GetColor(0));

plot OneHundred = 100;
OneHundred.SetLineWeight(1);
OneHundred.SetDefaultColor(GetColor(0));

plot OneHundredTen = 110;
OneHundredTen.SetLineWeight(1);
OneHundredTen.SetDefaultColor(GetColor(0));

FullK.DefineColor("OverBought", GetColor(5));
FullK.DefineColor("Normal", GetColor(7));
FullK.DefineColor("OverSold", GetColor(1));
FullK.AssignValueColor(if FullK > over_Bought then FullK.Color("OverBought") else if FullK < over_Sold then FullK.Color("OverSold") else FullK.Color("Normal"));
FullK.SetDefaultColor(GetColor(5));

FullD.DefineColor("OverBought", GetColor(5));
FullD.DefineColor("Normal", GetColor(7));
FullD.DefineColor("OverSold", GetColor(1));
FullD.AssignValueColor(if FullD > over_Bought then FullD.Color("OverBought") else if FullD < over_Sold then FullD.Color("OverSold") else FullD.Color("Normal"));
FullD.SetDefaultColor(GetColor(0));

OverBought.SetDefaultColor(GetColor(1));
OverSold.SetDefaultColor(GetColor(1));
UpSignal.SetDefaultColor(Color.UPTICK);
UpSignal.SetPaintingStrategy(PaintingStrategy.ARROW_UP);
DownSignal.SetDefaultColor(Color.DOWNTICK);
DownSignal.SetPaintingStrategy(PaintingStrategy.ARROW_DOWN);



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