Math 101: Fast Stochastics

AFL Programming
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1

Somebody recently asked over support channel for Fast Stochastic formulas.

Stochastics come with %K and %D lines and two flavors: "fast" and "slow". %D line is derived by smoothing %K line by 3-bar simple moving average. Then "slow" favor is obtained by yet another moving average applied on top of either fast %K or fast %D.

AmiBroker has built-in StochK() and StochD() functions that can return both "fast" and "slow" stochastics. The following table shows how this works

Stochastic AFL code Alternative AFL code
Fast %K (period) StochK( period, 1 )
Fast %D (period) StochK( period, 3 ) StochD( period, 3, 1 )
Slow %K (period) StochK( period, 3 ) StochD( period, 3, 1 )
Slow %D (period) StochD( period, 3, 3 )

As you can see Fast %D is the same as Slow %K. And Slow %D is actually double smoothed Fast %K.

Also for those who want "analytical" formula here it comes:

// FAST STOCHASTICS

function FastK( Kperiod )
{
	mh = HHV( H, Kperiod );
	ml = LLV( L, Kperiod );
	
	return 100 * ( C - ml ) / ( mh - ml );
}

function FastD( Kperiod, Dperiod )
{
	return MA( FastK( Kperiod ), Dperiod );
}

// fast stochastic %K -- both are the same
Plot( StochK( 14, 1 ), "StochK( 14, 1 )", colorRed );
Plot( FastK( 14 ), "FastK( 14 )", colorGreen );

// fast stochastic %d -- all three are the same
Plot( StochK( 14, 3 ), "StochK( 14, 3 )", colorBlue );
Plot( StochD( 14, 3, 1 ), "StochD( 14, 3, 1 )", colorYellow );
Plot( FastD( 14, 3 ), "FastD( 14, 3 )", colorGreen );
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