Stoch_VX3

The Stoch_VX3 indicator provides an enhanced Stochastic oscillator experience by integrating crossover markers, directional background highlighting, and percentile ranking to identify trend shifts and overextended market conditions.

Usage

The Usage section describes how the script can be used to identify momentum and trend direction. The indicator is designed to function as both a standalone momentum tool and a component of the VX series of technical indicators.

• Directional Bias: The chart background changes color based on the relationship between the %K and %D lines. A green background indicates a bullish state where %K is above %D, while a red background indicates a bearish state where %K is below %D.
• Crossover Signals: Visual markers (circles) are plotted at the intersection of the %K and %D lines. These markers serve as immediate alerts for potential momentum reversals.
• Overbought/Oversold Levels: Standard horizontal levels at 80 and 20 provide a visual reference for traditional overextended price zones.
• Trend Confluence: For higher probability setups, users often look for alignment between this indicator and other tools in the VX family, such as the Baseline_VX1 or MACD_VX1, to confirm that momentum and baseline trends are synchronized.

Details

The Stoch_VX3 utilizes a combination of traditional oscillator logic and percentile-based statistics. The core logic calculates a Stochastic value based on the high, low, and close prices over a user-defined length, which is then smoothed to create the %K and %D lines.

The script also implements a custom lag function (similar to a Laguerre filter) applied to the median price (HL2). This function generates short and long smoothed averages used to calculate a Price Percentage Oscillator (PPO). This PPO is then processed through a percentile rank calculation over a specified lookback period (PRO-Top and PRO-Bottom). This secondary layer of data helps in identifying "PRO" levels where price movement is statistically extreme compared to the recent historical lookback.

Settings

Stochastic Settings

• length: Determines the lookback period for the Stochastic calculation.
• smoothK: Sets the smoothing factor for the %K line.
• smoothD: Sets the smoothing factor for the %D line (the moving average of %K).

Percentile & PPO Settings

• %: The primary percentile threshold used for identifying extreme price ranking.
• ** %:** A secondary "warning" percentile threshold.
• LONG: The input factor for the short-period lag average calculation.
• SHORT: The input factor for the long-period lag average calculation.
• 'PRO-Top: The lookback period used to calculate the percentile rank for the top range.
• 'PRO-Bottom: The lookback period used to calculate the percentile rank for the bottom range.

FAQ

What does the background color represent? The background color indicates the current momentum bias based on the Stochastic crossover. Green signifies that the %K line is currently above the %D line, while red signifies that the %K line is below the %D line.

How do the crossover markers work? The indicator plots a circle on the oscillator whenever the %K and %D lines cross. This highlights specific points where momentum may be shifting direction.

How can I access Stoch_VX3? You can get access on the LuxAlgo Library for charting platforms like TradingView, MetaTrader (MT4/MT5), and NinjaTrader for free.