McClellan Oscillator Analysis & McClellan Oscillator Signals

Created by McClellan.

The McClellan Oscillator is an indicator that's based on smoothing the difference between the No. of bullish candlesticks and bearish candles. This technical indicator looks very 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 technical indicator. There are 3 techniques/methods that McClellan Oscillator can be used to generate signals.

Zero Centerline Crossover Signals:

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

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

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 different types of divergence-setups:

Classic Divergence ( Regular Divergence )

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

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

Hidden Divergence Setup

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

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

Oversold/Over-bought Levels in Trading Indicator

The McClellan Oscillator is also used to identify the potential overbought and oversold levels in price action movements. The overbought and over-sold 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 and over-sold levels for a long time. It is not recommended to trade over-bought and oversold levels to generate signals. The best signal to use is the Centerline cross-over signals to generate trading signals.

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