As its name suggests, this oscillator is a stochastic MACD smoothed twice
It has eight adjustable parameters:
- Stochastic period
- Smoothing - smoothing period
- Signal period - signal line period
- Fast EMA period
- Slow EMA period
- Applied price
- Overbought - overbought level
- Oversold - oversold level
Calculation:
DSS = PrevDSS + Beta * (DDS3-PrevDSS)
Signal = PrevSignal + Alpha * (DSS-PrevSignal)
where:
DDS3 = 100.0 * (DDS2-Min2) / (Max2-Min2)
Max, Min - maximum and minimum DDS2 values in the 'Stochastic period' range
DDS2 = PrevDDS2 + Beta * (DDS1-PrevDDS2)
DDS1 = 100.0 * (MACD-Min1) / (Max1-Min1)
Max1, Min1 - maximum and minimum MACD values in the 'Stochastic period' range
MACD = EMA(Applied price, Fast EMA period) - EMA(Applied price, Slow EMA period)
Alpha = 2.0 / (1+Signal_EMASignal period)
Beta = 2.0 / (1+Smoothing)