[David Waring]

Link to The Formula for Stochastics

I received a question today in response to yesterday's video. The question is what is the difference between the fast, slow and full stochastic?

The difference between the fast stochastic and the slowstochastic is that in the fast stochastic the %K line is “raw” meaning that it is not slowed down using a moving average. The slow stochastic is called slow because in the slow stochastic the “raw” %K line used in the fast stochastic is slowed down by taking a 3 period moving average of the data points and plotting that as the %K line. So basically in the fast stochastic the %K line and the %D line are going to move a lot more than they are in the slow stochastic. This can be seen as a positive in the sense that you will get more trading signals using the fast stochastic however this is also a negative from the standpoint of you are also going to get more false signals.

In both the fast and slow stochastic you can change the number of periods for the indicator and the number of periods used in the moving average of the %K line which generates the %D line.

The difference with the full stochastic is in the full stochastic you can also change the number of periods used in the moving average which generates the %K line to further speed up or slow down the movement of this line as well.