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 similar to the traditional MACD.

McClellan Oscillator Indicator Analysis - Mcclellan Oscillator MT4 Indicator

McClellan Oscillator

XAUUSD Analysis & How to Generate Signals

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

Zero Center-Line Cross over Signals:

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

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

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

Technical Analysis in XAUUSD Trading

Divergence 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 several 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 and lower highs in the McClellan Oscillator.

Hidden Divergence Setup

Bullish Divergence: Higher lows in price action and 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 potential overbought and oversold levels in price action movements. The overbought & oversold conditions are generated when the oscillator moves to extreme levels on one side and starts to turn, however, in a strong trending market the oscillator will stay in the overbought & oversold levels for a long time. It's not recommended to trade overbought & oversold levels to generate trade signals. Best signal to use is the Center Line cross over signals to generate trade signals.