The Adaptive Stochastic
Indicator V1 was created by John Ehlers
(Rocket Science For Traders pgs
233-234) and this indicator uses the same calculations to find a cycle period that is then used for both the creation of the stochastic
indicator but also for the smoothing to create a double smoothed stochastic
indicator. Because it is calculated this way, this indicator is more reactive than almost any other stochastic
indicator and provides clear buy and sell signals especially when the underlying stock is trending. It is interpreted in the same way as a normal stochastic
indicator so great buy signals are when the indicator is below the oversold line and starts to move up and vice versa. Buy when the line turns green and sell when it turns red.
Let me know if there are any other indicators you would like to see me publish!