Premium Stochastic Oscillator

The PSO is a rewired version of a short-period stochastic. Unlike a standard stochastic oscillator, this indicator is normalized to register neutral values at zero while providing greater sensitivity to short-term price moves. This indicator uses a central zero line as a reference point and will oscillate above and below this point as price fluctuates. In addition, the PSO is smoothed by using a double exponential moving average to provide a more even response to turns in the market.

(from TASC magazine, August 2008 issue).

The Premium Stochastic Oscillator was introduced by technical analyst Lee Leibfarth.

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