Full Stochastic:
The “Full Stochastic” combines the features of Slow and Fast versions and gives us the flexibility to change parameters. Slow Stochastic is a slower version of the Fast or the original Stochastic but Full version gives us an option as to how much slow we want to make it. It gives us an option to make it slower or faster. The market movements can be very volatile. In technical analysis analyzing the movements in different time frame charts is quite important.
When we try to apply “Full Stochastic” to our trading chart, it would offer a default setting like Full Stochastic (14,3,3)”. While when we apply the normal Stochastic Oscillator or Slow Stochastic, the default setting offered would be (14,,3)” or “Slow Stochastic (14,,3)”.
The Full Stochastic Oscillator takes three parameters. Just as in the Fast and Slow versions, the first parameter is the number of periods used to create the initial %K line (for example if analyzing previous 14 periods and hence “14”). The last parameter is the number of periods used to create the %D (for example if %D is 3-period moving average of %K then this parameter = 3).
What the middle parameter is doing in this full version?:
Well, in Slow Stochastic for %K line we take 3-period moving average of the %K line of the Fast Stochastic.
(For ready reference: “To find %K (slow) in the Slow Stochastic Oscillator, a 3-period SMA (simple moving average) is applied to %K (fast). This 3-day SMA slows (or smoothes) the data to form a slower version of %K (fast).” In slow version we can not change this default 3-period SMA which is used to create the %K line of the slow version. The Full Stochastic gives us this flexibility. If we use 2 as the middle parameter i.e. Full Stochastic (14, 2, 3) then it will be 2-period SMA of %K of fast version which will be used to get %K of full Stochastic.
| Type |
%K |
%D |
Fast Stochastic (14,3)
Means analyzing past 14 periods for %K and for %D taking simple moving average of %K for previous 3 periods. |
Current price comapred to the highest and lowest of the selected period |
3 period moving average of %K |
| Slow Stochastic (14,3) |
3 period moving average of %K of Fast Stochastic = % K of Slow version.
(this 3-period SMA is default and we can not change this value to let's say 2-period average) |
3 period moving average of %K of Slow Stochastic |
| Full Stochastic (14,X,3) |
X period moving average of %K of Fast Stochastic = % K of Full Stochastic (so more flexible then Slow Stochastic)
There is a middle parameter "X". If X= 3 then this Full version is same as the above mentioned Slow version. But if we change it to (14,2,3) then it is
2-period moving average of %K of Fast Stochastic = % K of Full Stochastic |
3 period moving average of %K of Full Stochastic |
Check main article for Stochastic Oscillator.
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