Abbreviation: %K Avg Diff
Category: Price Momentum Indicators: Smoothed
Input Parameters:
| Name | Range | Default |
| High Price | High | |
| Low Price | Low | |
| Closing Price | Close | |
| Stochastic Periods | Int >= 1 | 5 |
| Avg1 Periods | Int >= 1 | 5 |
| Avg2 Periods | Int >= 1 | 10 |
Calculation:
Avg(X, Avg1 Periods) – Avg(X, Avg2 Periods)
where
X = Stoch%K(High Price, Low Price, Closing Price, Stochastic Periods)
Stoch%K represents Stochastic %K
Avg represents Simple Moving Average
Discussion:
This indicator attempts to quantify movements in the Stochastic %K indicator by calculating the difference between two moving averages. Since it uses simple moving averages (which give equal importance to all the periods within the moving average’s time frame), the indicator treats all periods alike, and does not focus more upon movement between recent or relatively higher volume periods as do the exponential and volume weighted variants.