Ultimate Oscillator Technical Analysis and Ultimate Oscillator Technical Signals
Originally developed and used to trade stock and commodities markets.
This oscillator aims at striking a balance between leading signals & lagging signals given by common indicators.
- Leading - some indicators lead the market & give signals earlier than the optimum time
- Lagging - some trading indicators lag the market so far that half of the move is over before a signal is generated.
This is the balance that the oscillator trading aims to strike, not to lead too much or lag too much - this way the oscillator trading will always give a signal at the ultimate time, thus its name.
This indicator uses three different n-number of candlesticks & calculates the combined weighted sums of price action from these candlesticks & plots these values a scale ranging from 0 to 100. Values of above 70 are considered to be overbought levels while values of below 30 are considered to be over-sold levels.
The time periods used to calculate the ultimate oscillator trading indicator are 7 periods (short term trend), 14 periods (intermediate term trend) and 28 periods (long term trend).
Forex Analysis & Generating Signals
This technical indicator can be used in generating buy and sell trading signals using various methods.
Center line Crossover Signal
Buy Trading Signal - values above 50 centerline level
Sell Trading Signal - values below 50 centerline level
Center line Cross over Signal
Over-bought/Oversold Levels on Technical Indicator
Overbought - levels above 70 - sell trade signal
Over-sold - levels below 30 - buy trade signal
Divergence Trading
The oscillator technical indicator also can be used to trade divergence signals, below is an example of a classic bearish divergence setup.
Technical Analysis
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