Ultimate Oscillator Technical Trading Analysis and Ultimate Oscillator Indicator Signals
Originally developed & used to trade stocks & 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 & give signals earlier than the ideal optimum time
- Lagging - some indicators lag the market so far that half of the move is over before a trade signal is generated.
This is the balance which this oscillator aims to strike, not to lead the market too much or lag the market too much - this way the oscillator trading will always give a signal at the ultimate time, thus its title.
This indicator uses three different n-number of candlesticks and calculates the combined weighted sums of price action from these candles and draws these values on a scale ranging from 0 to 100. Values of above 70 are considered and regarded to be over-bought levels while values of below 30 are considered and regarded to be oversold 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).
Analysis and How to Generate Signals
This technical indicator can be used in generating buy and sell signals using various different methods.
Center line Trading Cross-over Signal
Buy Trading Signal - values/readings above 50 center-line level
Sell Trading Signal - values/readings below 50 centerline level
Center line Trading Cross-over Signal
Over-bought/Oversold Levels in Indicator
Overbought - levels above 70 - sell trading signal
Over-sold - levels below 30 - buy signal
Divergence Trade
The oscillator trading also can be used to trade divergence setups, below is an illustration of a classic bearish divergence trade setup.
Technical Analysis
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