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.

β€’ Signal confirmation - %K crossing above %D in oversold territory confirms buy signals β€’ Noise reduction - Filters out false signals common in volatile markets β€’ Trend validation - Rising %D confirms bullish momentum, falling %D confirms bearish momentum β€’ Multi-timeframe analysis - Combine different timeframes for swing trading β€’ 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)

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

πŸ”΄ SHORT STRATEGY (Smoothed Sensitive 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

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

Best Practices

For LONG Strategies

For SHORT Strategies

Common Mistakes to Avoid

Market Conditions Analysis

Market Type
LONG Strategy Effectiveness
SHORT Strategy Effectiveness

Uptrend

🟑 Medium (smoothed sensitive bounces)

πŸ”΄ Low (against trend)

Downtrend

πŸ”΄ 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

πŸ”΄ Low (false signals)

πŸ”΄ Low (false signals)

Indicator
Relationship
Link

Stochastic RSI %K

Fast signal line

RSI

Base momentum indicator

Stochastic %D

Similar smoothed oscillator

Volume

Crossover confirmation

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

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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