The stochastic oscillator is one of the most popular indicators.
It is normalized, that is, it always oscillates between 0 and 100 (or between 0 and 1: depending on the scale used) giving unambiguous information on the status of the stock: whether overbought or oversold, thus purifying it from the effect of the trend.
By isolating the fluctuations around the trend, the stochastic makes fast trading possible, that is, the execution of operations much faster than those that are normally allowed in a trend-following strategy.
This newly developed KROFT trading system normally shows an equity RSquare of 0.95, thus indicating a very high operational reliability. The Standard Error of Estimate of the equity is normally around 7%, with a volatility of the result therefore widely bearable even by the most anxious traders easy prey to evaluation errors.
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