McClellan Oscillator Analysis & McClellan Oscillator Signals

Developed by McClellan.

The McClellan Oscillator is an indicator that is based on smoothing the difference between the number of bullish candlesticks and bearish candles. This technical indicator looks similar to the traditional MACD.

McClellan Oscillator

Gold Analysis and Generating Signals

This Oscillator is a momentum indicator that can be traded in the same way as MACD indicator. There are 3 techniques that McClellan Oscillator Trading Indicator can be used to generate trading signals.

Zero Center-Line Cross over Signals:

Bullish Signals- When the oscillator crosses above the zero center-line a buy signal is given.

Bearish Signals- When the oscillator crosses below the zero center-line a sell signal is given.

Analysis in XAUUSD Trading

Divergence Trading Setup Signals:

Looking for divergences between the McClellan Oscillator and price can prove to be very effective in spotting the potential market reversal &/or market trend continuation points in price movement.

There are various types of divergences:

Classic Divergence ( Regular Divergence )

• Bullish Divergence: Lower lows in price action & higher lows in the McClellan Oscillator.

• Bearish Divergence: Higher highs in price and lower highs in the McClellan Oscillator Trading Indicator.

Hidden Divergence Setup

• Bullish Divergence: Higher lows in price action & lower lows in McClellan Oscillator Trading Indicator.

• Bearish Divergence: Lower highs in price action and higher highs in McClellan Oscillator.

Oversold/Over-bought Levels on Trading Indicator

The McClellan Oscillator is also used to identify potential overbought and over-sold levels in price action movements. The overbought & oversold conditions are generated when the oscillator technical moves to extreme levels on one side and starts to turn, however, in a strong trending market the oscillator will stay in the overbought & oversold levels for a long time. It's not recommended to trade over-bought and over-sold levels to generate trading signals. The best signal to use is the Centerline cross-over signals to generate trading signals.

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