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The StocRSI indicator is a hybrid indicator that employs a 21 day fast stochastic indicator , 14 day RSI, adds half the value of each and takes a 13 day EMA of the summed value to arrive at the final calculation. It was developed and employed by Don Beasley who is a professional money manager and currently a pricipal at Trademark Capital in Athens, GA.
The idea is to identify assets that are trending up in value (StocRSI > 50) and purchase then and hold these assets until they cease to trend (StocRSI < 50). Another concept is to hold the asset when they are strongly trending (StocRSI > 65).
Looking at the plot of the indicator and the underlying asset, one might be well served to apply a moving average to serve as a "signal line" and hold the underlying asset when the StocRSI > the "signal line" moving average. This would hold the underlying asset while it is trending up and sell the asset when it was trending down. On might hold the asset when the StocRSI > 65. You may want to apply some sort of smoothing to StocRSI prior to creating the "signal line".
The plot of the standard function is a bit mundane and you can spice it up a bit:
Plot multicolor line with Green = Stoc > 50
plot(StocRSI, 'StocRSI(21,14,13)', colorRed, ChartLine, StyleSymbolNone);
UpdateColor(StocRSI > 50, colorGreen);
plot(50, 'Threshold', colorBlack, chartLine, StyleSymbolNone);
Trading financial instruments, including foreign exchange on margin, carries a high level of risk and is not suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in financial instruments or foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with trading and seek advice from an independent financial advisor if you have any doubts.
