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Thread: STO Formula Calculation for %D

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    Default STO Formula Calculation for %D

    I noticed that Investopedia and Stockcharts offer two different calculation formulas for %D which serves as the signal/trigger line for the STO indicator. Investopedia indicates that %D is calculated as:
    %D = 100 X (H3/L3) or another words %D=100*(High Over Last 3 Days/Low Over Last 3 Days)
    Stockcharts indicates that %D is calculated as:
    %D = 3-day SMA of %K or another words %D=AVERAGE(%K Current Value, %K Yesterday's Value, %K Day Before Yesterday's Value)
    Does anyone know which of these two formulas is correct based on the original STO formula calculation for %D? Comparing the formulas, it seems that investopedia offers a more realistic computation for %D since its computation is based off of high/low values (just like the calculation used for %K that is consistent on both sites) rather than stocksharts that uses an average of %K values.
    Last edited by blueroadster; 11-06-2014 at 10:14 PM.


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