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THE BRESSERT DOUBLE STOCHASTIC OSCILLATOR

The Double Stochastic oscillator (DBS10), shown in Template 1, is a powerful trading tool and trend indicator generating high-probability Mechanical Buy/Sell Signals that also serve as identifiers of cycle bottoms and tops.

When trading any market, it is extremely important to be aware of cycle length and the expected time periods for cycle tops and bottoms. The ProfitTrader™ oscillators generate Mechanical Buy and Sell Signals that tend to occur at cycle tops and bottoms, and there is an accuracy factor to consider when using the Mechanical Buy and Sell Signals to both trade and identify cycle tops and bottoms.

• The DBS10 tends to make highs and lows at cycle tops and bottoms of an average 17-23 day (or week) trading cycle (price bars for intraday). This cycle length, measured from bottom-to-bottom, occurs in most time frames - weekly, daily, one-half day, quarter-day, hourly, 20-minute; therefore, we often refer to cycle lengths in "price bars".
  
• The shorter-term DBS5 tends to make highs and lows at cycle tops and bottoms of an average 8-12 day (or price bars) one-half trading cycle, and often combinations with the DBS10 to generate Buy/Sell Signals at cycle tops and bottoms.

The accuracy factor of the Bressert DoubleStoc10 Buy Signals is approximately 70%. Seven times out of 10, a Buy Signal will occur following a cycle bottom, which means the cycle is moving up and has yet to top. On the downside, the DBS10 generates Sell Signals that are approximately 65% accurate in that the signals occur following a cycle top, implying that prices will continue lower into the trading cycle bottom.

The Bressert DoubleStoc 5 generates Buy and Sell Signals that are up to 90% accurate for the shorter-term cycles.

The DoubleStoc greatly improves the reliability and performance of the standard stochastic oscillator, which wiggles too much to be used to generate high-probability trading signals. The standard stochastic oscillator also gets stuck at high levels in bull markets, and at low levels in bear markets. The Bressert DoubleStoc remedies those problems. Unlike the standard stochastic, the Bressert Double Stochastic is constructed to have increased amplitude in trending markets resulting in 50% more trading signals than the standard stochastic, that are on average 10% to 25% more accurate than the standard stochastic.