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This looks like DiNapoli's Preferred Stochastic. The key is to move the math
around so you can express it in terms of an exponential moving average. On
investigation you will discover that the 3 day MAV is equal to a 5-day EMA,
at which point you can use a fairly standard stochastic formula. However, my
recollection is that the MAV approach is used for both slowings - i.e. K to
SlowK and D to slow D.
Note that this stochastic formulation is unique to DiNapoli's approach, and
that he is using it as part of a trend-identifying combination with a
specific MACD, not for oversold or overbought. It gives fewer crossovers
than a regular Stochastic.
Andrew
-----Original Message-----
From: pbay01 [mailto:pbay01@xxxxxxxxxxxx]
Sent: Friday, September 24, 2004 7:04 AM
To: equismetastock@xxxxxxxxxxxxxxx
Subject: [EquisMetaStock Group] help with formula
Hi I was wondering how do I write this formula
%K(of the slow stochastic)=%D(of the fast stochastic)
%D(of the slow stochastic)=3 period MAV of %K(of the slow stochastic)
MAV= Modified Moving Average
MAV=MAV(t-1)+[P-MAV(t-1)/n]
where
MAV = current moving average value
MAV(t-1) = the previous modified moving average value
P=current price
n is the number of periods
The starting point of MAV is calculated identically to that of a
Simple Moving Average.
Thank You in Advance.
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