Trading Tools - Oscillators

5 min. readlast update: 11.04.2024

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Oscillators

Oscillators are crucial tools in detecting overbought and oversold market conditions. They also provide insights into momentum that can help traders make informed decisions about when to enter or exit a trade. 

Oscillators mechanics

Oscillator indicators are essential for Forex, Stocks, Crypto derivatives, and more. They determine the market context and assist investors in identifying precise visions for entry and exit points. 

Oscillator indicators commonly have a feature of dynamic signal lines that may fluctuate within specific levels to declare overbought and oversold levels. The most common Forex oscillators are the Relative Strength Index (RSI), Commodity Channel Index (CCI), Stochastic, and Moving Average Convergence Divergence (MACD). 

Oscillators activation

  • Press on the "Technical analysis" icon.
  • Then choose "Oscillators." 
  • Choose the Oscillator you want to activate.
  • Adjust the tool and start enjoying the results

 

Available Oscillators

The Stochastic Oscillator, a Momentum indicator, uses two lines (%D and %K) ranging from 0 to 100. When they intersect within 0-50, it signals a bearish trend, and within 50-100, a bullish trend. It also highlights overbought and oversold levels: 0-50 suggests oversold, while 50-100 indicates overbought conditions. Understanding these signals helps in trading strategies.

 

Stochastic

Buy with Oversold Level

Sell with Overbought Level
If you spot the two moving average lines crossing each other around line 20 (Oversold zone), it clearly indicates an imminent bullish trend. This is the perfect time to initiate a buy trade and reap the benefits.  When the two moving average lines converge around line 80, indicating an Oversold zone, it clearly indicates an impending bearish trend. This presents an opportune moment to consider initiating a sell trade. 

The Relative Strength Index (RSI)

The relative strength index (RSI) is a technical analysis indicator that traders use to measure the speed at which an asset’s price is moving. This indicator is also used to evaluate whether the asset is in an overbought or oversold position.

The RSI, serves as a valuable tool for traders to gauge the velocity of an asset's price movement. It not only helps in determining the speed but also assists in assessing whether the asset is in an overbought or oversold position. 

With CCI, you can measure the current price of the asset relative to the average price in a given time interval. It is used to predict the reversal of the trend for long trades, spot divergence, and determine whether the market is oversold or overbought.

You know the market is overbought when the green line exceeds 100. When the CCI line crosses the 100 lines on its way down, it is surely time to sell. In the opposite situation, that means when the CCI indicator exceeds -100

Commodity Channel Index (CCI)

Inversion Bollinger

The oscillator consists of two traditional Bollinger Bands indicators, visually depicted as a line that fluctuates between the +3σ and -3σ standard deviations on the chart.

The Stochastic RSI technical indicator combines two indicators, namely Stochastics and the Relative Strength Index (RSI).

By merging the strengths of both indicators, the Stochastic RSI provides a more precise analysis of the asset's overbought and oversold periods. The overbought level is indicated by the 0.8 (80%) mark, while the oversold level is indicated by the 0.2 (20%) mark. 

Stochastic RSI 

Moving Average Convergence/Divergence (MACD) 

By analyzing the moving average convergence/divergence (MACD), traders can determine the ideal moments to enter or exit trades.

This technical indicator comprises of two moving average lines and a histogram, which provide insights into the trend's momentum and direction. 

The DeMarker oscillator is a reliable tool for identifying the intensity and trajectory of a trend and locating potential reversal points.

The DeMarker oscillator fluctuates between two values, 0 and 1, occasionally surpassing the thresholds of 0.3 and 0.7. Whenever these thresholds are breached, an opportunity to initiate a trade based on the corresponding prediction is indicated. 

DeMarker

Bears Power/Bulls Power

Bears Power is an additional indicator calculated by subtracting the 13-period EMA from the lowest price, while Bulls Power is calculated by subtracting the 13-period EMA from the highest price. 

Williams %R is a powerful tool for analyzing the movement of an asset's price and identifying potential trend reversals. This oscillator operates on a scale from 0 to -100, with periodic crossings at -20 and -80.

When Williams's %R crosses below -20, it indicates that the asset's price has climbed to an excessively high level. 

Conversely, when it crosses below -80, it suggests that the price has dropped to an extremely low level. 

Williams %R 

Gator 

Gator is an oscillator, capable of appearing as a bar chart, lines, or shaded areas. Typically, it is presented as a bar chart comprising red and green bars that begin at the zero level.

The green bars signify that the oscillator's chart is ascending, while the red bars indicate a downward movement. 

Subscription process

You can get the paid Oscillator through "Trader's Way" or buy it in the "Market" section.

  • Click on the paid Oscillator.
  • Choose whether you want to subscribe or try for free.  
  • Choose your payment plan.
  • Choose the sub-account you want to subscribe through. And turn on/off auto-renewal. 
  • Done. Now you can enjoy your Oscillator. 

Cancellation process

Once you subscribe to an Oscillator, it won't be canceled until the end of the month. However, you can cancel the auto-renewal at any time, unless it is 24 hours before the renewal date.

  • Choose "Market" on your homepage then "My purchases and rewards."
  • Choose the indicator you want to cancel.
  • Turn off auto-renewal.

Does using Oscillators guarantee the trading results?

You have the option to decide whether or not to execute a trade according to the Oscillator. Using it is super easy! It is sensitive to know that Oscillators help with analytics but do not guarantee the results that might be affected by many factors. Market add-ons are for informational and analytical purposes only. They should not be construed as investment advice or recommendations; you should research and analyze them. 

 

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