Ultimate Oscillator Indicator Technical Analysis & Ultimate Oscillator Indicator Signals
Originally developed and used to trade stocks and commodities markets.
This oscillator aims at striking a balance between leading signals & lagging signals given by the common technical indicators.
- Leading - some indicators lead the market and 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 gets generated.
This is the balance that the oscillator indicator aims to strike, not to lead too much or lag too much - this way the oscillator indicator will always give a signal at the ultimate time, thus its name.
This indicator uses three different n-number of candles & calculates the combined weighted sums of price action from these candles & draws 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 are 7 periods (short term trend), 14 periods (intermediate term trend) & 28 periods (long term trend).
Technical Analysis & How to Generate Signals
This technical indicator can be used in generating buy & sell trade signals using various different methods.
Center line Stock Indices Crossover Trade Signal
Buy Trade Signal - values above 50 center line level
Sell Signal - values below 50 center-line level
Center line Stock Indices Crossover Signal
Overbought/Oversold Levels on Technical Indicator
Over-bought - levels above 70 - sell trade signal
Over-sold - levels below 30 - buy trade signal
Divergence Indices Trading
The oscillator indicator can also be used to trade divergence signals, below is an example of a classic bearish divergence setup.
Technical Analysis
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