Fast Stoch (5)
Momentum
The same stochastic, but over only 5 bars instead of 14 — much faster and much more nervous.
In its original form this indicator uses volume and/or the daily range (High/Low). The scanner only has closing prices and approximates those inputs (see the note at the bottom). So treat the absolute values as indicative; the direction and the crossings remain usable.
Construction & calculation
- Identical to the plain stochastic, but with a lookback window of 5 bars.
- In the scanner this variant is used mainly as an extra chart when zooming in on a stock.
%K = 100 x (C - lowest(5)) / (highest(5) - lowest(5))
Interpretation
- Reacts almost instantly to a price turn — useful for short-term timing of an entry you have already decided on the basis of a slower indicator.
- Use it as a refinement: the slow stochastic decides whether you buy, the fast one decides when.
Watch-outs & pitfalls
- A lot of noise. As a standalone signal it is virtually unusable — which is why it is not a separate row in the signal matrix.