Stochastic RSI %D (14, 5, 3, 0)

The Stochastic RSI %D (14, 5, 3, 0) is a momentum oscillators indicator used in Skyrexio Strategy Builder for momentum analysis and overbought/oversold identification.

Introduction

The Stochastic RSI %D (14, 5, 3, 0) is a smoothed sensitive momentum oscillator that provides neutral directional bias for both LONG and SHORT opportunities. As a smoothed version of Stochastic RSI %K, it reduces noise while maintaining the enhanced sensitivity of the Stochastic RSI calculation.

How Stochastic RSI %D Works

Stochastic RSI %D is a smoothed version of StochRSI %K, calculated as a moving average to reduce noise and provide more reliable signals. The %D line acts as a signal line for %K crossovers.

• Signal confirmation - %K crossing above %D in oversold territory confirms buy signals • Noise reduction - Filters out false signals common in volatile markets • Trend validation - Rising %D confirms bullish momentum, falling %D confirms bearish momentum • Multi-timeframe analysis - Combine different timeframes for swing trading • Reliability enhancement - Smoothing reduces whipsaws while maintaining sensitivity

Smoothed Sensitivity Psychology: Stochastic RSI %D combines the enhanced sensitivity of Stochastic RSI with smoothing to reduce false signals. This creates a more reliable version of the sensitive momentum oscillator, providing the best of both worlds - early signals with reduced noise. The %K/%D crossovers are particularly reliable in extreme zones.

Key Characteristics

Attribute
Details

Category

Momentum Oscillators

Type

Smoothed Sensitive Momentum Signal

Primary Use

Noise-reduced sensitive momentum confirmation

Timeframe

All timeframes supported (1m to 1M)

Confirmation

%K crossovers, RSI alignment, volume

Strategy Applications

🟢 LONG STRATEGY (Smoothed Sensitive Recovery)

Stochastic RSI %D is neutral - use %K crossing above %D in oversold territory for LONG entries when smoothed sensitive momentum confirms upward reversal.

Base Entry Order (LONG)

Trigger Type: Once per bar close
Bar TF: 1H
First Condition: Stochastic RSI %K (14, 5, 3, 0)
Timeframe: 1H
Operator: Cross Above
Second Condition: Stochastic RSI %D (14, 5, 3, 0)
Timeframe: 1H

Additional Entry Orders (LONG)

Additional Entry 1: Oversold crossover confirmation
First Condition: Stochastic RSI %D (14, 5, 3, 0)
Timeframe: 1H
Operator: Less Than
Second Condition: Value
Value: 0.3

AND

First Condition: Stochastic RSI %K (14, 5, 3, 0)
Timeframe: 1H
Operator: Greater Than
Second Condition: Stochastic RSI %D (14, 5, 3, 0)
Timeframe: 1H

OR

Additional Entry 2: RSI alignment confirmation
First Condition: RSI (14)
Timeframe: 1H
Operator: Less Than
Second Condition: Value
Value: 40

AND

First Condition: Stochastic RSI %D (14, 5, 3, 0)
Timeframe: 1H
Operator: Greater Than
Second Condition: Stochastic RSI %D (14, 5, 3, 0)
Timeframe: 1H
Offset: 1

Take Profit Orders (LONG)

Rule 1: Exit condition - Overbought crossover reversal
First Condition: Stochastic RSI %K (14, 5, 3, 0)
Timeframe: 1H
Operator: Cross Below
Second Condition: Stochastic RSI %D (14, 5, 3, 0)
Timeframe: 1H

AND

First Condition: Stochastic RSI %D (14, 5, 3, 0)
Timeframe: 1H
Operator: Greater Than
Second Condition: Value
Value: 0.7

OR

Rule 2: Exit condition - Smoothed momentum peak
First Condition: Stochastic RSI %D (14, 5, 3, 0)
Timeframe: 1H
Operator: Greater Than
Second Condition: Value
Value: 0.8

OR

Rule 3: Exit condition - RSI momentum divergence
First Condition: RSI (14)
Timeframe: 1H
Operator: Greater Than
Second Condition: Value
Value: 70

AND

First Condition: Stochastic RSI %D (14, 5, 3, 0)
Timeframe: 1H
Operator: Less Than
Second Condition: Value
Value: 0.6

Stop Loss Orders (LONG)

Rule 1: Stop loss - Bearish crossover confirmed
First Condition: Stochastic RSI %K (14, 5, 3, 0)
Timeframe: 1H
Operator: Cross Below
Second Condition: Stochastic RSI %D (14, 5, 3, 0)
Timeframe: 1H

OR

Rule 2: Stop loss - Smoothed momentum breakdown
First Condition: Stochastic RSI %D (14, 5, 3, 0)
Timeframe: 1H
Operator: Less Than
Second Condition: Value
Value: 0.1

AND

First Condition: Volume
Timeframe: 1H
Operator: Greater Than
Second Condition: Simple Moving Average (20)
Timeframe: 1H

OR

Rule 3: Stop loss - RSI breakdown confirmation
First Condition: RSI (14)
Timeframe: 1H
Operator: Less Than
Second Condition: Value
Value: 25

🔴 SHORT STRATEGY (Smoothed Sensitive Reversal)

Stochastic RSI %D is neutral - use %K crossing below %D in overbought territory for SHORT entries when smoothed sensitive momentum confirms downward reversal.

Base Entry Order (SHORT)

Trigger Type: Once per bar close
Bar TF: 1H
First Condition: Stochastic RSI %K (14, 5, 3, 0)
Timeframe: 1H
Operator: Cross Below
Second Condition: Stochastic RSI %D (14, 5, 3, 0)
Timeframe: 1H

Additional Entry Orders (SHORT)

Additional Entry 1: Overbought crossover confirmation
First Condition: Stochastic RSI %D (14, 5, 3, 0)
Timeframe: 1H
Operator: Greater Than
Second Condition: Value
Value: 0.7

AND

First Condition: Stochastic RSI %K (14, 5, 3, 0)
Timeframe: 1H
Operator: Less Than
Second Condition: Stochastic RSI %D (14, 5, 3, 0)
Timeframe: 1H

OR

Additional Entry 2: RSI alignment confirmation
First Condition: RSI (14)
Timeframe: 1H
Operator: Greater Than
Second Condition: Value
Value: 60

AND

First Condition: Stochastic RSI %D (14, 5, 3, 0)
Timeframe: 1H
Operator: Less Than
Second Condition: Stochastic RSI %D (14, 5, 3, 0)
Timeframe: 1H
Offset: 1

Take Profit Orders (SHORT)

Rule 1: Exit condition - Oversold crossover reversal
First Condition: Stochastic RSI %K (14, 5, 3, 0)
Timeframe: 1H
Operator: Cross Above
Second Condition: Stochastic RSI %D (14, 5, 3, 0)
Timeframe: 1H

AND

First Condition: Stochastic RSI %D (14, 5, 3, 0)
Timeframe: 1H
Operator: Less Than
Second Condition: Value
Value: 0.3

OR

Rule 2: Exit condition - Smoothed momentum trough
First Condition: Stochastic RSI %D (14, 5, 3, 0)
Timeframe: 1H
Operator: Less Than
Second Condition: Value
Value: 0.2

OR

Rule 3: Exit condition - RSI momentum divergence
First Condition: RSI (14)
Timeframe: 1H
Operator: Less Than
Second Condition: Value
Value: 30

AND

First Condition: Stochastic RSI %D (14, 5, 3, 0)
Timeframe: 1H
Operator: Greater Than
Second Condition: Value
Value: 0.4

Stop Loss Orders (SHORT)

Rule 1: Stop loss - Bullish crossover confirmed
First Condition: Stochastic RSI %K (14, 5, 3, 0)
Timeframe: 1H
Operator: Cross Above
Second Condition: Stochastic RSI %D (14, 5, 3, 0)
Timeframe: 1H

OR

Rule 2: Stop loss - Smoothed momentum breakout
First Condition: Stochastic RSI %D (14, 5, 3, 0)
Timeframe: 1H
Operator: Greater Than
Second Condition: Value
Value: 0.9

AND

First Condition: Volume
Timeframe: 1H
Operator: Greater Than
Second Condition: Simple Moving Average (20)
Timeframe: 1H

OR

Rule 3: Stop loss - RSI breakout confirmation
First Condition: RSI (14)
Timeframe: 1H
Operator: Greater Than
Second Condition: Value
Value: 75

Advanced Strategy Combinations

Smoothed Sensitive Divergence Strategy

Enhanced Divergence Detection:

  • Price: Makes new high/low

  • Stochastic RSI %D: Smoothed momentum fails to confirm

  • RSI: Regular RSI confirms divergence

  • Crossover: %K crosses %D in opposite direction

Triple Confirmation Strategy

Setup Process:

  1. Stochastic RSI %K reaches extreme levels (>0.8 or <0.2)

  2. %K crosses %D in reversal direction

  3. Regular RSI confirms momentum alignment

  4. Volume expansion supports the move

Execution:

  • Base Order: %K/%D crossover at extreme levels

  • Additional: RSI alignment with Stochastic RSI signals

  • Take Profit: Opposite extreme levels with crossover reversal

  • Stop Loss: Triple confirmation breakdown

Multi-Timeframe Smoothed Sensitive Analysis

Setup Process:

  1. Daily RSI shows major momentum direction

  2. 4H Stochastic RSI %D confirms smoothed momentum

  3. 1H %K/%D crossover provides precise entry

  4. Volume expansion supports sensitive momentum shift

Execution:

  • Base Order: 1H %K/%D crossover aligned with higher timeframes

  • Additional: Multi-timeframe smoothed momentum confirmation

  • Take Profit: Higher timeframe momentum reversal

  • Stop Loss: Multi-timeframe momentum breakdown

Risk Management Guidelines

Position Sizing

Strategy Type
Position Size
Conditions

LONG Strategy

Standard

%K crosses above %D in oversold

SHORT Strategy

Standard

%K crosses below %D in overbought

Triple Confirmation

Increased

All three indicators align

Divergence Plays

Reduced (75%)

Counter-trend momentum signals

Stochastic RSI %D Reliability Factors

✅ %K/%D crossovers at extreme levels (>0.7 or <0.3) ✅ RSI alignment with Stochastic RSI signals ✅ Smoothed momentum acceleration/deceleration ✅ Volume expansion supports crossover ✅ Clear divergence patterns with confirmation

Best Practices

For LONG Strategies

  1. Oversold crossovers - Wait for %K to cross above %D below 0.3

  2. RSI alignment - Confirm with regular RSI oversold conditions

  3. Smoothed confirmation - Ensure %D is turning upward

  4. Volume validation - Confirm crossovers with volume expansion

For SHORT Strategies

  1. Overbought crossovers - Wait for %K to cross below %D above 0.7

  2. RSI alignment - Confirm with regular RSI overbought conditions

  3. Smoothed confirmation - Ensure %D is turning downward

  4. Volume validation - Confirm crossovers with volume expansion

Common Mistakes to Avoid

  • Middle range crossovers - Trading %K/%D crossovers between 0.3-0.7

  • No RSI confirmation - Ignoring regular RSI alignment

  • Volume ignored - Missing volume validation of crossover signals

  • Smoothing ignored - Not considering %D momentum direction

Market Conditions Analysis

Market Type
LONG Strategy Effectiveness
SHORT Strategy Effectiveness

Uptrend

🟡 Medium (smoothed sensitive bounces)

🔴 Low (against trend)

Downtrend

🔴 Low (against trend)

🟡 Medium (smoothed sensitive reversals)

Ranging

🟢 High (reliable crossovers)

🟢 High (reliable crossovers)

High Volatility

🟢 High (smoothing reduces noise)

🟢 High (smoothing reduces noise)

Low Volume

🔴 Low (false signals)

🔴 Low (false signals)

Related Indicators

Indicator
Relationship
Link

Stochastic RSI %K

Fast signal line

Stochastic RSI %K

RSI

Base momentum indicator

RSI

Stochastic %D

Similar smoothed oscillator

Stochastic %D

Volume

Crossover confirmation

Volume

Conclusion

Stochastic RSI %D provides smoothed sensitive momentum signals that combine the enhanced sensitivity of Stochastic RSI with noise reduction. Success depends on proper crossover timing, RSI alignment, and volume confirmation.

Key Takeaways

  • PRIMARY USE: Smoothed sensitive momentum confirmation through %K/%D crossovers

  • SECONDARY USE: Noise reduction while maintaining enhanced sensitivity

  • ALWAYS: Confirm crossovers at extreme levels with RSI alignment and volume

  • NEVER: Trade middle-range crossovers without triple confirmation

Success with Stochastic RSI %D requires understanding its role as a smoothed version of the sensitive Stochastic RSI %K. The key is waiting for %K/%D crossovers at extreme levels, confirming with regular RSI, and validating with volume expansion.

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