Lee Leibfarth’s article, “Premier Stochastic Oscillator” describes the calculation of his new indicator and a system using it.

The MetaStock formulas and instructions for adding these to MetaStock are:

To enter the indicators into MetaStock:

1. In the Tools menu, select Indicator Builder.
2. Click New to open the Indicator Editor for a new indicator.
3. Type the name of the formula: Premier Stochastic
4. Click in the larger window and type in the formula:

x:=Input("stochastic length",2,25,8);

y:=Input("periods",1,100,25);

len:=LastValue(Sqrt(y));

nsto:= 0.1 * (Stoch(x,1)-50);

ssto:=Mov( Mov( nsto, len, E), len, E);

(Exp(ssto)-1)/(Exp(ssto)+1)

1. Click Ok to close the Indicator Editor.

To create the system:

1. Select Tools > the Enhanced System Tester.
2. Click New
3. Enter a name, “Premier Stochastic Strategy”
4. Select the Buy Order tab and enter the following formula.

x:=8;

y:=25;

len:=LastValue(Sqrt(y));

nsto:= 0.1 * (Stoch(x,1)-50);

ssto:=Mov( Mov( nsto, len, E), len, E);

psto:=(Exp(ssto)-1)/(Exp(ssto)+1);

Cross(.9, psto) OR Cross(.2, psto)

1. Select the Sell Order tab and enter the following formula.

x:=8;

y:=25;

len:=LastValue(Sqrt(y));

nsto:= 0.1 * (Stoch(x,1)-50);

ssto:=Mov( Mov( nsto, len, E), len, E);

psto:=(Exp(ssto)-1)/(Exp(ssto)+1);

Cross(psto,-0.9) OR Cross(psto,-0.2)

1. Select the Sell Short Order tab and enter the following formula.

x:=8;

y:=25;

len:=LastValue(Sqrt(y));

nsto:= 0.1 * (Stoch(x,1)-50);

ssto:=Mov( Mov( nsto, len, E), len, E);

psto:=(Exp(ssto)-1)/(Exp(ssto)+1);

Cross(psto,-0.9) OR Cross(psto,-0.2)

1. Select the Buy to Cover Order tab and enter the following formula.

x:=8;

y:=25;

len:=LastValue(Sqrt(y));

nsto:= 0.1 * (Stoch(x,1)-50);

ssto:=Mov( Mov( nsto, len, E), len, E);

psto:=(Exp(ssto)-1)/(Exp(ssto)+1);

Cross(.9, psto) OR Cross(.2, psto)

1. Click OK to close the system editor.

William Golson
MetaStock