McClellan Oscillator Analysis and McClellan Oscillator Signals
Developed by McClellan.
The McClellan Oscillator is an indicator that's based on smoothing the difference between the number of bullish candles and bearish candlesticks. This indicator looks very similar to the traditional MACD technical indicator.
McClellan Oscillator
XAU/USD Analysis and How to Generate Trading Signals
This Oscillator is a momentum indicator which can be transacted in the same way as the MACD indicator. There are 3 methods that McClellan Oscillator Technical can be used to generate trading signals.
Zero Center Line Cross over Signals:
Bullish Signals- When the oscillator crosses above zero centerline a buy signal is given.
Bearish Signals- When the oscillator crosses below zero center line a sell signal is generated.
Technical Analysis in XAU/USD Trading
Divergence Trade Setup Signals:
Looking for divergences between the McClellan Oscillator and price can prove to be very effective in spotting potential reversal and/or trend continuation points in price movement.
There are various types of divergences:
Classic Trade Divergence ( Regular Trade Divergence )
- Bullish Divergence: Lower lows in price action & higher lows in the McClellan Oscillator.
- Bearish Divergence: Higher highs in price & lower highs in the McClellan Oscillator.
Hidden Divergence Trading Setup
- Bullish Divergence: Higher lows in price action & lower lows in McClellan Oscillator.
- Bearish Divergence: Lower highs in price action and higher highs in McClellan Oscillator.
Overbought/Oversold Levels on Indicator
The McClellan Oscillator is also used to identify the potential over-bought and oversold levels in price action movements. The over-bought and oversold conditions are generated/derived when oscillator moves to extreme levels on one side and starts to turn, however, in a strong trending market the oscillator will stay in the over-bought and oversold levels for a long time. It's not recommended to trade over-bought & oversold levels to generate trade signals. Best signal to use is the Center Line cross over signals to generate signals.
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