OPEN-SOURCE SCRIPT
Short-Term Capitulation Oscillator (STCO, Diodato 2019)
Description:
This script is a faithful implementation of the Short-Term Capitulation Oscillator (STCO) from Chris Diodato's 2019 CMT paper, "Making The Most Of Panic". It's a tactical breadth and volume oscillator designed to "fish for market bottoms" by identifying short-term investor capitulation.
What It Is
The STCO combines the 10-day moving averages of NYSE up-volume and advancing issues. It measures the ratio of advancing momentum (in both volume and number of issues) relative to the total traded momentum. The result is a raw, un-normalized oscillator that typically ranges from 0 to 200.
How to Interpret
The STCO is a tactical tool for identifying near-term oversold conditions and potential bounces.
Low Readings: Indicate that sellers have likely exhausted themselves in the short term, creating a potential entry point for a bounce. The paper found that readings below 90, 85, and 80 were often followed by strong market performance over the next 5-20 days.
Overbought/Oversold Lines: Use the customizable overbought/oversold lines to define your own capitulation zones and potential entry areas.
Settings
Data Sources: Allows toggling the use of "Unchanged" issues/volume data.
Thresholds: You can set the overbought and oversold levels based on the paper's research or your own testing.
This script is a faithful implementation of the Short-Term Capitulation Oscillator (STCO) from Chris Diodato's 2019 CMT paper, "Making The Most Of Panic". It's a tactical breadth and volume oscillator designed to "fish for market bottoms" by identifying short-term investor capitulation.
What It Is
The STCO combines the 10-day moving averages of NYSE up-volume and advancing issues. It measures the ratio of advancing momentum (in both volume and number of issues) relative to the total traded momentum. The result is a raw, un-normalized oscillator that typically ranges from 0 to 200.
How to Interpret
The STCO is a tactical tool for identifying near-term oversold conditions and potential bounces.
Low Readings: Indicate that sellers have likely exhausted themselves in the short term, creating a potential entry point for a bounce. The paper found that readings below 90, 85, and 80 were often followed by strong market performance over the next 5-20 days.
Overbought/Oversold Lines: Use the customizable overbought/oversold lines to define your own capitulation zones and potential entry areas.
Settings
Data Sources: Allows toggling the use of "Unchanged" issues/volume data.
Thresholds: You can set the overbought and oversold levels based on the paper's research or your own testing.
نص برمجي مفتوح المصدر
بروح TradingView الحقيقية، قام مبتكر هذا النص البرمجي بجعله مفتوح المصدر، بحيث يمكن للمتداولين مراجعة وظائفه والتحقق منها. شكرا للمؤلف! بينما يمكنك استخدامه مجانًا، تذكر أن إعادة نشر الكود يخضع لقواعد الموقع الخاصة بنا.
إخلاء المسؤولية
لا يُقصد بالمعلومات والمنشورات أن تكون، أو تشكل، أي نصيحة مالية أو استثمارية أو تجارية أو أنواع أخرى من النصائح أو التوصيات المقدمة أو المعتمدة من TradingView. اقرأ المزيد في شروط الاستخدام.
نص برمجي مفتوح المصدر
بروح TradingView الحقيقية، قام مبتكر هذا النص البرمجي بجعله مفتوح المصدر، بحيث يمكن للمتداولين مراجعة وظائفه والتحقق منها. شكرا للمؤلف! بينما يمكنك استخدامه مجانًا، تذكر أن إعادة نشر الكود يخضع لقواعد الموقع الخاصة بنا.
إخلاء المسؤولية
لا يُقصد بالمعلومات والمنشورات أن تكون، أو تشكل، أي نصيحة مالية أو استثمارية أو تجارية أو أنواع أخرى من النصائح أو التوصيات المقدمة أو المعتمدة من TradingView. اقرأ المزيد في شروط الاستخدام.