Stochastic

[Gene]

Can someone explain what 'smoothed' by a moving average mean in the below help excerpt about Stochastic Values
After I calculate the current close's relationship to the highest and lowest in the price range, I need to know the calculations necessary to 'smooth it' ??


Excerpted from Esignals help file:
A Stochastic displays two lines, %K and %D. %K is calculated by finding the highest and lowest point in a trading period and then finding where the current close is in relation to that trading range, %K is then smoothed with a moving average. %D is a moving average of %K.
end of excerpt.

Thanks !

[EdKoF]

What is says that %K is a moving average of the 'current close in relation to that trading range'.

Smoothing is nothing more than taking out short-term irregularities by taking a moving average.

So a (normal) moving average is a 'smoothed price' (if you take an MA of a price that is).

Hope this helps,

Edo.