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Re: Stochastic indicators for MT4

mladen, Wed Feb 15, 2017 9:04 pm

This is a kind of correlation, divergence and stochastic indicator all in one

It shows the divergence of two symbols using stochastic as values and a criteria for divergence.

Posting the original description here too :

This one is from the book a friend sent to me : "Evidence-Based Technical Analysis Applying the Scientific Method and Statistical Inference to Trading Signals" from David A Ronson.

In one place (starting from page 430 ) the author is mentioning the use of stochastic (he calls it a "Channel normalization operator" but from a definition of it it is clear that it is what we usually refer to as "Stochastic") to detect divergences of two symbols.

The idea itself is simple and that is why I like it : 2 stochastics of a smoothed price are calculated for the current symbol and for the symbol that is used to comparison.

Then the difference of those 2 stochastics is calculated. The a further enhancement is done by one additional stochastic applied to this difference in order to get clearer and more usable values.
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