DSS Indicator’s calculation formula is quite similar to the stochastic algorithm. Walter Bressert designed the Double Smoothed Stochastics (DSS): it consists of two exponentially smoothed moving averages used to balance out the input values (H, L and C), in the same way to the stochastic indicator.
Trading with DSS Indicator
The adaptable interval duration can be selected from 2 to 500. The most frequent configurations of the DSS Indicator would have an interval duration which range from 5 to 30. Additionally, the indicator may be smoothed in the length between 1 and 50. Significant smoothing values are within the short-term range.
DSS Trading Signals
DSS Indicator interpretation is very similar to the stochastic strategy. Basically, levels above 80 have to be considered overbought and levels under 20 as oversold. An increase of the DSS over its middle line should be considered as bullish, and a drop of the DSS under its middle line as bearish.
Double Smoothed Stochastic Formula
- Numerator: primary the difference between present close and the period low.
- Denominator: the difference between the period high and the period low. Now the quotient of numerator and denominator is determined, exponentially smoothed and increased by 100.
- The procedure is actually similar to 1 with the variation that now the prices of the newly determined price series of 1 is utilized.
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