First thing to keep in mind is how stochastics is calculated. After the period is determined (in our case 300) then the three values that are relevant is the current close, the highest high and the lowest low of the period. Google and review the formula and you will see this. In short, stochastics is just a little graph that show where the current close sits in comparison to the highest high and the lowest low of the studied period. So for example...
If the highest high in the period (last 300 bars in our case) is 1.50 and the lowest low in the period is 1.30 and the price is currently at 1.40, then stochastic will be at 50%. This will be re calculated every time a new candle opens.
We are using a 300 period stochastics in our charts and we are comparing this to the EMA1. EMA1 will show nothing but the close of every candle, similar to a line chart. So what we have so far is...
EMA1 (candle close) --> Stochastics 300 (close compared to range of high-low).
In order to asses similarity, we are comparing both of the above by means of using a 24 period BB. By looking at the BB values on both, the EMA1 and the stock, we can see if the are aligned. If am correct, in a nutshell, this is what the StochDiff indicator is doing.
Is this clear so far?
If the highest high in the period (last 300 bars in our case) is 1.50 and the lowest low in the period is 1.30 and the price is currently at 1.40, then stochastic will be at 50%. This will be re calculated every time a new candle opens.
We are using a 300 period stochastics in our charts and we are comparing this to the EMA1. EMA1 will show nothing but the close of every candle, similar to a line chart. So what we have so far is...
EMA1 (candle close) --> Stochastics 300 (close compared to range of high-low).
In order to asses similarity, we are comparing both of the above by means of using a 24 period BB. By looking at the BB values on both, the EMA1 and the stock, we can see if the are aligned. If am correct, in a nutshell, this is what the StochDiff indicator is doing.
Is this clear so far?
Please pull my head out of my ass, I am running out of oxygen...