ultimate oscillator

Ultimate oscillator indicator was created by Larry Williams.

Ultimate oscillator is an indicator that is used to measure the price of momentum across three time frame,that is,7,14 and 28.

Ultimate oscillator indicator is based on divergence and oversold and overbought in the market.
Since it is an oscillation,it can be seen oscillating from 20 to 80.When the divergence occurs when the ultimate oscillator curve falls below 30,that will be an indication of bullish market thus the trader should close any sell position and enter a buy position since the market will start moving upwards while when the divergence occurs when the ultimate oscillator curve rises above 70,that will be an indication of a bearish market thus the trader should close any buy position and enter a sell position since the market will start moving downwards.This is indicated as from the candle sticks chart below




From the candle sticks chart above,there are 3 points,point A,B and C . Point C represents the ultimate oscillator curve while point A and B represents divergence above 70 and below 30 respectively.At point A divergence of the market has occurred when the ultimate oscillator is above 70 thus an indication of downward market reversal.This will signal the trader to close any buy position and enter a sell position since the market will start moving downwards at that point.On the other hand,at point B,divergence of the market has occurred when the ultimate oscillator is below 30 thus an indication of upward market reversal.This will signal the trader to close any sell position and enter a buy position since the market will start moving upwards at that point.

Comments

Post a Comment

Popular posts from this blog

MA cross

Image
MA cross is a trading indicator that is used to filter out noise from the price chart. MA cross can also be used by a trader to know the direction in which the price is moving. MA cross indicator is a trend indicator. MA cross is based on the crossover. Based on the crossover, MA cross has two moving average, the shorter term moving average and the longer term moving average. The shorter-term moving average is normally red in color and it represents the price while the longer term moving average is normally blue in color and it represents the moving average. Therefore, since MA cross is based on the crossover, it, therefore, follows that when the short term moving average crosses above the long-term moving average that will be an indication of an upward market movement thus the trader should be trading upwards. On the other hand, when the short term moving average crosses below the long-term moving average that will be an indication of a downward market thus the trader should b
Read more

Least Square Moving Average(LSMA)

Image
Least square moving average is also called linear regression moving average. Least square moving average is a trend following indicator. Just like in other moving average indicators, least square moving average is also used to indicate the direction of the market, that is whether the market is trending upwards or downwards. Least square moving average is based on bullish and bearish market as well as support and resistance. Least square moving average is therefore calculated using the following formula; LSMA= h*t+b  where as h={(n Σt i x i ) -  ( Σt i Σx i )}/{(n Σt i ) - ( Σt i Σt i )} b=1/n Σx i -h*1/n Σt i while t is the time and n is the period Since least square moving average is a trend following indicator and is based on bullish and bearish, it therefore follows that when the market is in an uptrend movement,the least square moving average will also be moving upwards while when the market is in a downward trend, the least square moving average will also be
Read more

coppock curve

Image
Coppock curve indicator was created by Edwin Sedge Coppock. The coppock curve is a momentum indicator that was mainly created to determine the buy entry in the stock market.Beside buy entry for stock sell signal can also be identify though not recommended. Coppock curve has 3 period,that is 10 period,14 period and 11 period. Coppock curve is an momentum oscillator and therefore has an oscillation at point 0.0000. Coppock curve is therefore calculated using the following formula which is based on the 3 periods; Coppock curve =( WMA of 10period) of (14 period ROC+11period ROC) Where as; WMA is Weight Moving Average; ROC is Rate Of Change indicator; Since coppock curve has an oscillation at point 0,it therefore follows that when the coppock curve falls below 0.000 that will be an indication that the market has become an oversold market thus the trader should close any sell position and enter a buy position.On the other hand though not recommendable ,when the coppock curv
Read more