Stochastics

Stochastic Oscillator for NT8

The Stochastics indicator supplied with NinjaTrader cannot be used with an input series other than price. We have recoded the indicators so that it may applied to other indicators. To do so, simply select any of the other NinjaTrader indicators as input series.

Indicator Description

The stochastic oscillator compares the closing price to the range over a certain period of time, effectively making it a momentum indicator.

Because it is range bound, the indicator is useful in identifying overbought and oversold levels. The range is defined by values from 0 to 100 where values below 20 express an oversold scenario. That means that the market is trading near the bottom of its high-low range. Values above 80 indicates an overbought scenario, i.e. that the market is trading near the top of its high-low range. Of course, these levels may be adjusted to fit the characteristics of the market you trade.

The Stochastics indicator can be used with the Library Roofing Filter to correct distortions in the fixed scale threshold readings. The threshold levels may then be used without manually adjusting them according to the current trend scenario.

The Stochastics indicator is best used when aligned with a higher timeframe trend / momentum bias. You may also increase the probability of successful trades by “buying support and selling resistance”. For additional information, please review Monthly Camarilla Pivots, Weekly Range Projections and the our Indicator Spotlights on the Daily Range ProjectionsDaily Pivot Levels and Fibonacci Retracement Lines.

Other library momentum oscillators

Other than the standard Stochastics, our standard momentum oscillators category feature a number of other entries, including a new and improved version of the standard Relative Strength Index, the Traders Dynamic Index, the Awesome Oscillator and the Know Sure Thing (KST) indicator. The NinjaTrader Indicators Library also has a category for advanced oscillators, with among others the Laguerre RSI, Connors RSI, Projection Oscillator, Rainbow Oscillator and the SVE Stochastics ITF. These tools build on the same concept as the standard momentum oscillators, but with a higher degree of sophistication. In general, they allow for added value approaches, utilizing a set of more complex algorithms.

The TDI indicator was reviewed in the Indicator Spotlight newsletter. The Ichimoku Kinko Hyo, also discussed in our Indicator Spotlight, has certain similarities with the MACD and the Donchian Channel mid line.

The Stochastic Oscillator is available for NinjaTrader 8.