Ultimate Oscillator Indices Technical Analysis and Ultimate Oscillator Trading Signals
Originally developed and used to trade stocks & commodities markets.
This oscillator aims at striking a balance between leading signals & lagging signals given by the common indicators.
- Leading - some indicators lead the stock indices trading market and give signals earlier than the optimum time
- Lagging - some indicators lag the stock indices trading market so far that half of the move is over before a signal is generated.
This is the balance that the oscillator aims to strike, not to lead too much or lag too much - this way the oscillator will always give a signal at the ultimate time, thus its name.
This stock indices indicator uses 3 different n-number of candlesticks and calculates the combined weighted sums of stock indices trading price action from these candlesticks and plots 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 oversold levels.
The time periods used to calculate the ultimate oscillator are 7 periods (short term trend), 14 periods (intermediate term trend) and 28 periods (long term trend).
Stock Indices Technical Analysis & How to Generate Signals
This Indices technical indicator can be used in generating buy and sell stock indices signals using various methods.
Center line Stock Indices Trading Crossover Trading Signal
Buy Indices Signal - values above 50 center line level
Sell Indices Trading Signal - values below 50 center-line level
Center line Stock Indices Trading Crossover Trading Signal
Overbought/Oversold Levels on Indicator
Overbought - levels above 70 - sell signal
Oversold - levels below 30 - buy signal
Divergence Indices Trading
The oscillator can also be used to trade divergence stock indices trading signals, below is an example of a classic bearish divergence signal.
Technical Analysis
