Double Smoothed Stochastic - DSS

What

DSS applies 2 smoothing EMAs of different lengths to a Stochastic Oscillator. DSS ranges from 0 to 100, like the standard Stochastic Oscillator.

How

Calculation of the DSS indicator is similar to Stochastics. The numerator: first the difference between the current close and the period low is formed, and this is then exponentially smoothed twice. The denominator is formed in the same way, but here the difference is calculated from the period high minus the period low. Numerator and denominator yield the quotient, and this value is multiplied by 100.

DSS-BLAU[p1,p2,p3] = EMA[p3, EMA[p2, Close - LowestLow[p1]] 100 * EMA[p3, EMA[p2, HighestHigh[p1]-LowestLow[p1]]

The handling and the calculations of signals is similar to the Stochastic-Indictor.

Parameters

Period 1 (default 5)

The period over which to consider highest highs and lowest lows.

Period 2 (default 7)

The period of the first smoothing

Period 3 (default 3)

The period of the second smoothing

When

The application of the DSS is comparable with that of the stochastic method. Accordingly, values above 70 or 80 must be regarded as overbought and values below 20 or 30 as oversold. A rise of the DSS above its center line should be viewed as bullish, and a fall of the DSS below its center line as bearish.