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Hi Walter,
Stochastic is actually a misnomer for the popular Lane's Stochastic that we
see in the normalized indicator. It's actually a synonym fro 'random'. (ref
TASC V.9:3) I think the picture is drawn weird so it looks like somthing
else is going on but I think it's just showing a random distribution equally
+/- from the slope line so it could represent a 1 Sigma or say 3 Sigma
channel. I guess. (Don't) Believe me I'm no math expert.
Chuck
----- Original Message -----
From: Walter Lake <wlake@xxxxxxxxx>
To: Metastock bulletin board <metastock@xxxxxxxxxxxxx>
Sent: Wednesday, April 28, 1999 5:36 PM
Subject: stochastic distribution
> Does anyone know what a "stochastic distribution" of the day's range is?
>
> I assume that it is the normalization of the day's range between 0 and 100
> for the high and the low and that the open would be placed "on" the
> distribution ... say at 65.
>
> Could anyone explain the enclosed slide "A Stochastic Relationship" which
> shows 3 high low daily ranges from
>
> http://econ-www.newcastle.edu.au/economics/econ245/lecture2/sld015.html
>
> Best regards
>
> Walter
>
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