A New Way to View Stochastics

When I first began learning about the various technical indicators in use today two issues came to mind. First, that it would be incredible difficult to infer the strength of a technical buy or sell signal. And second, that many of the indicators were not nearly as predictive as they claimed to be. These are two important concerns considering how dependent successful trading is on understanding accurate indicators.

SwamiCharts improve on original indicators by displaying action over a range of parameters so that you can better assess true market action at a glance. This provide a better visualization of an indicator’s true meaning because you’re able to see a composite range of lookback periods.

To illustrate, I’ve included the Swami Stochastics indicator on the below chart showing Verizon’s past 6 month of activity.  The indicator became bullish on the 23rd March and remained that way until the 8th of April.  You simply would not have gotten these clear and contextual buy/sell signals by using the traditional stochastic visualization.

*If you would like to try SwamiCharts the classical indicators (Aroon, CCI, RSI, and Stochastics) are all free to download here.

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