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OmniTrader Pro General Discussion
OT Stochastics Calculation
Last Activity 9/23/2020 10:17 AM
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JR

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Joined: 9/15/2020
Location: Santee, CA

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Subject : OT Stochastics Calculation
Posted : 9/15/2020 2:17 PM
Post #31238

Hi,

When I add the OT Stochastics Indicator to a chart, I noticed that it was not working the way I expected. On further examination, the values do not match the calculation that I have always used and it does not match other trading packages.

The Stochastics formula is simple:

%K = (C−L14/H14−L14) x 100 (the 14 is usually an input value)
%D = 3-period moving average of %K

So the question is: Is OT using a special calculation or is the result unintended?

In any event, is it possible to get a traditional Stochastic indicator in OT?

Thanks,

JR

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Jim Dean

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Subject : RE: OT Stochastics Calculation
Posted : 9/15/2020 5:56 PM
Post #31240 - In reply to #31238

Offhand, this is likely since different packages sometimes use different smoothing methods. IIRC, OT uses EMA for smoothing (%D). Some others might use SMA. Btw - your posted formula is a bit misleading … stochastic uses LLV and HHV … at least in OT terminology.

To check this, input D periods =1 for OT and your other platform. If they do match, that confirms it. Now input D=10 for both. If OT seems to react more quickly than the other platform, the other platform is likely using SMA.

I’d have to know what the other platform is using (ie in their native code), to tell you how to duplicate it in OT.

You could create a Quick Indicator in OT that does the calc “raw” to illustrate/test this:

EMA( ( C - LLV(14) ) / ( HHV(14) - LLV(14) ), 3 ) * 100

versus

SMA( ( C - LLV(14) ) / ( HHV(14) - LLV(14) ), 3 ) * 100

[Edited by Jim Dean on 9/15/2020 5:58 PM]

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JR

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Subject : RE: OT Stochastics Calculation
Posted : 9/16/2020 5:14 PM
Post #31241 - In reply to #31240

Hi Jim,

Thanks for the reply!

I understand the smoothing issue. However, I don't ever use the %D. I use the %K and it is not a smoothed value.

If %K = (C - LLV(14)) / (HHV(14) - LLV(14)), there really is no ambiguity unless the price bars are different. The OT Stochastics indicator values are using some formula other than this. Maybe it's better for some purposes but it lags from my point of view. I'm wondering if it is a bug.

The Quick Indicator worked great. I can see the indicators side by side on the chart now and there are differences.

Thanks!

JR

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