LazyBear

Indicator: Premier Stochastic Oscillator

The PSO , developed by Lee Leibfarth, is a rewired version of a short-period stochastic . This provides a quick response to changes in market direction. This highly sensitive indicator allows for early anticipation of price turns and can be used to establish definitive trading zones that identify potential trading opportunities.

Rules as suggested by Mr.Lee:

For long trades:
(1) Premier stochastic crosses below 0.90
(2) premier stochastic crosses below 0.20

For short trades:
(1) Premier stochastic crosses above -0.90
(2) premier stochastic crosses above -0.20

More info on the trading zones and other nuances:
http://www.investopedia.com/articles/tra...

List of my free indicators: http://bit.ly/1LQaPK8
List of my indicators at Appstore: http://blog.tradingview.com/?p=970
Open-source script

In true TradingView spirit, the author of this script has published it open-source, so traders can understand and verify it. Cheers to the author! You may use it for free, but reuse of this code in a publication is governed by House Rules. You can favorite it to use it on a chart.

Want to use this script on a chart?
//
// @author LazyBear
//
study("Premier Stochastic Oscillator [LazyBear]", shorttitle="PSO_LB")
stochlen = input(8, title="Stoch length")
smoothlen = input(25, title="Smooth length")
sk = stoch( close, high, low, stochlen)
len = round(sqrt( smoothlen ))
nsk = 0.1 * ( sk - 50 )
ss = ema( ema( nsk, len ), len )
expss = exp( ss )
pso = ( expss - 1 )/( expss + 1 )
plot( pso, title="Premier Stoch", color=black, linewidth=2 )
plot( pso, color=iff( pso < 0, red, blue ), style=histogram )
plot(0, color=gray)
plot( 0.2, color=blue, style=3 )
plot( 0.9, color=blue)
plot( -0.2, color=red, style=3)
plot( -0.9, color=red )