McClellan Oscillator Indices Technical Analysis & McClellan Oscillator Signals

Created by McClellan.

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

McClellan Oscillator - McClellan Oscillator Indicator Analysis - Mcclellan Oscillator MT4 Indicator

McClellan Oscillator Indicator

Indices Technical Analysis & How to Generate Signals

This Oscillator is a momentum indicator that can be traded and transacted in the same way as MACD indicator. There are Three techniques that McClellan Oscillator Technical Indicator can be used to generate signals.

Zero Center Line Crossover Signals:

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

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

McClellan Oscillator Indicator - McClellan Oscillator Indicator Analysis - Mcclellan Oscillator MT4 Indicator

Technical Analysis in Indices Trade

Divergence:

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

There are several types of divergences:

Classic Stock Index Trade Divergence (Regular Stock Indices Trade Divergence)

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

Bearish Divergence: Higher highs in price & lower highs in the McClellan Oscillator.

Hidden Stock Indices Trade Divergence Setup

Bullish Divergence: Higher lows in price action and lower lows on the McClellan Oscillator Indicator.

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

Over-bought/Oversold Levels on Technical Indicator

The McClellan Oscillator is also used to identify the potential overbought & oversold levels in price action movements. The overbought and over-sold conditions are derived & generated when the oscillator indicator moves to extreme levels on one side & 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's not recommended to trade over-bought and over-sold levels to generate trade signals. The best signal to use is the Center Line cross over signals to generate trade signals.

Learn More Lessons and Tutorials and Topics:

Trade Stock Indices