ExtremeValueDSignal(String,Series,Double,Double,Int32,Int32,Int32) Method

Implements a general framework for producing extreme value trading signals using Stochastic indicators.

[Visual Basic]
Overloads Public Shared Function ExtremeValueDSignal( _
   ByVal seriesName As String, _
   ByVal s As Series, _
   ByVal extremeLow As Double, _
   ByVal extremeHigh As Double, _
   ByVal noOfPeriods As Integer, _
   ByVal method As Integer, _
   ByVal lengthOfMA As Integer _
) As Series

[C#]
public static Series ExtremeValueDSignal( 
   string seriesName,
   Series s,
   double extremeLow,
   double extremeHigh,
   int noOfPeriods,
   int method,
   int lengthOfMA
);

Parameters

seriesName

An series where the first element is the closing price in the last trading period, the second term is the closing price in the previous trading period and so on.

s

The name of the series which will be displayed on the chart, i.e. its label.

extremeLow

This is the level at which the Stochastic is believed to indicate an oversold level. The Stochastic always lies between 0 and 100, and a suggested extreme low value to take is 20.

extremeHigh

This is the level at which the Stochastic is believed to indicate an over brought level. The Stochastic always lies between 0 and 100, and a suggested extreme high value is 80.

noOfPeriods

An integer which represents the number of periods used over which the closing price is compared.

method

Determines the methods used for the evaluation of the moving average in accordance with the following key:

1 = Simple moving average
2 = Geometric moving average
3 = Linearly weighted moving average
4 = Exponentially Weighted Moving average within smoothing fact set to be 0.5.

For further details concerning the definition of these moving averages please see the accompanying PDF documentation or the API documentation for SimpleMovingAverage.

lengthOfMA

The number of periods over which the moving average is considered.

Return Type

-1, 0, 1 - this method returns either -1, 0, 1 to indicate that either a sell, no action or buy signal was generated.

Remarks

Note, that the general ides of this approach is to seek points which are oversold or over brought levels which are turning.

Methodology

Buy when the Oscillator the Stochastic %D falls below a specific level (e.g. 20) and then rises above that level. Sell when the Oscillator rises above a specific level (e.g. 80) and then falls below that level. This approach is the preferred method of the Stochastics original creator George Lane.

See Also

Language