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Sunday, 03 July 2022


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Adaptive Stochastic Indicator

Stochastic Oscillator is one of the most popular and accurate oscillators widely used by traders to capture overbought and oversold areas of price action. Although the Stochastic indicator works fine for an interval of the market, it fails to generate profitable signals when the market conditions change, and hence it produces wrong signals resulting in big losses.
Have you ever thought about an adaptive Stochastic indicator that adapts its period of calculation based on the market conditions? The presented indicator implements an optimization algorithm which identifies the best period for calculation of Stochastic indicator based on maximization of the profit over N-past bars. You can imagine that the optimization process of the strategy tester of MetaTrader is continuously running on live charts to find the best Stochastic period, based on which the profit of trading on the Stochastic signals will be maximized. The values of this indicator, similar to that of the Stochastic indicator, are shown between 0 and 100.


  1. If the Stochastic value crosses the level 20 upwards, it is assumed to be a BUY signal.
  2. If the Stochastic value crosses the level 80 downwards, it is assumed to be a SELL signal.

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