Laguerre Stochastic | Adulari

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Description:
The Laguerre Stochastic is similar to a 4-period regular Stochastic, except that a Laguerre transform has been applied for price smoothing. The Laguerre transform is a mathematical technique that allows smooth indicators to be built using small amounts of data.

How do I use it?

• Never use this indicator as standalone trading signal, it should be used as confluence.
  
• When the value is above the middle line this shows the bullish trend is strong.
  
• When the value is below the middle line this shows the bearish trend is strong.
  
• When the value crosses above the upper line this indicates the trend may reverse downwards.
  
• When the value crosses below the lower line this indicates the trend may reverse upwards.
  
• When the value crosses above the signal this indicates the current bearish trend is getting weak and may reverse upwards.
  
• When the value crosses below the signal this indicates the current bullish trend is getting weak and may reverse downwards.
  

Features:

• Oscillator value indicating the difference between highs and lows fractioned by the close price.
  
• %D value acting as a smoothed version of the %K.
  
• Horizontal lines such as oversold, overbought and middle lines, indicating possible interest zones.
  

How does it work?
1 — Calculate regular Stochastic value.
2 — Apply the Laguerre transform.
3 — Calculate %D value by applying smoothing to the %K value.