As shown above, the indicator is made up of two key parts. First, there is the neutral line at zero. Second, there are the green and red bars. Therefore, a bullish view emerges when the bars turn green below the neutral line and is then confirmed when it rises above the neutral point. In most cases, you should place a buy trade when the indicator is moving in an upward trend and vice versa.

Indeed, the indicator is relatively similar to the moving average convergence divergence MACD. The only difference is that the MACD uses the day EMA — the day EMA. Its signal line is usually the 9-day exponential moving average of the MACD line. Still, as we have written before, it is usually not necessary to understand how the indicator is calculated. Instead, you should just know how to interpret it in the market. Using the awesome oscillator is a relatively easy process since it is usually available in most trading platforms like the MetaTrader and TradingView.

As mentioned above, the first approach of using the indicator is to look at the neutral line. In most cases, a bullish signal is usually sent when the awesome oscillator moves from the bottom and crosses the neutral line. Similarly, a bearish signal usually emerge when the oscillator moves from the upper side and crosses the neutral line as shown below. Another approach of using this indicator is to buy when the histogram is below the neutral line but when the green lines move simultaneously while going up.

This is usually a sign that bulls are gaining control after the price got oversold. Similarly, you should short once the red lines start falling the oscillator reaches a high point. Another strategy you can use the awesome oscillator with is known as the twin peaks strategy. It is a strategy that involves looking at peaks above and below the indicator.

A bullish twin peak happens when there are two consecutive peaks below the neutral line. In this case, the second peak should be higher than the initial one. A good example of this is shown in the chart below. A bearish twin peak , on the other hand, happens when there are two straight peaks above the neutral line.

The second peak should be below the neutral line. When this happens, it increases the possibility that the asset will start a bearish trend. Another Awesome Oscillator trading strategy is known as the saucer approach. In it, traders attempt to identify three consecutive bars on the histogram to identify signals.

A bullish pattern emerges when there are two straight red bars with the second one being lower than the initial one. The third bar must be green in color. On the other hand, a bearish sign is seen when there are two straight green bars where the second one is lower than the initial one.

In most cases, this strategy is usually not all that accurate. Finally, you can also use the awesome oscillator in combination with other indicators. For example, when following a trend, you can combine oscillator with the moving average to identify when a reversal is about to happen.

A good example is in the chart below. At the time, the oscillation was above the neutral line while the price was also above the day simple moving average. On the other hand, when the histogram is below the 0 line, it signifies that the downtrend is gathering strength. Unlike the Stochastics, RSI, or CCI, there are no predetermined overbought or oversold levels in the MACD oscillator.

However, the trick is to compare the highs and lows in MACD to price action in relation to previous high and lows. In doing so, you can easily find convergence and divergence. Figure 4: MACD Contrarian Divergence Market Entries. The best way to use the MACD to find a market entry opportunity is to be a contrarian. It means looking for long opportunities when the MACD signal line is way below the 0 level and produces a buy signal.

By contrast, you should look for a sell signal when the MACD signal line is trading far away above the 0 level. And, if you find a divergence , it will only improve the chance of a windfall, as demonstrated in figure 4. The Awesome Oscillator AO was created by the famous trader Bill Williams to measure the difference between the latest 5 periods Simple Moving Average SMA and 34 periods SMA. It is plotted as a histogram, like the MACD.

Simply put, when the histogram is above the zero line and increasing, it signals that bullish momentum is increasing. When the histogram is below the 0 line and decreasing, it signals that bearish momentum is increasing. Most traders use the AO zero line crossover when the histogram goes above or below the 0 line from the other side, as a signal for change in predominant trend.

But if you use the AO as a standalone indicator this way, you will likely find many false signals. The best way to use the AO indicator is called the Twin Peak strategy, which is a fancy term that basically describes trading divergence.

The important thing to remember that bearish Twin Peaks occur above the 0 line and bullish Twin Peaks occur below it.

To enter the market with a bearish AO Twin Peak, you need to wait for two consecutive peaks to form above the zero line, where the second peak is lower than the first one. As we can see in figure 5, place a short order when a red line on the histogram appears. By contrast, to trade a bullish AO Twin Peak, you need to wait for two consecutive peaks to occur below the 0 line. On this occasion, the second peak must be higher than the first one.

Then, when the first green bar appears on the histogram, enter the market with a long order. Oscillator indicators are great at finding direction and measuring the momentum of the directional movement of asset prices. But using a single oscillator to find market entries would be too aggressive for even the most experienced technical traders.

Instead, we recommend that you combine one of the top 5 oscillators we discussed above with price action, either breakouts or candlestick patterns, to confirm before placing any orders.

thank you guy…this is valuable article among the best that I ever had…. I like to create a robot base on this …. This content is blocked. Accept cookies to view the content. click to accept cookies. This website uses cookies to give you the best experience.

Agree by clicking the 'Accept' button. Advertisement - External Link. Rolf Indicators , Technical Analysis 1. Similarly, it would be near the low during a downtrend.

The Stochastics oscillates between two fixed values, 0 and Figure 1: Stochastics Bullish Divergence In figure 1, we can see that the EURUSD has remained in a sustained uptrend and respected a trend line. Relative Strength Index RSI Just like the Stochastics, the Relative Strength Index RSI oscillates between the 0 and values. Figure 2: RSI Finds Support and Resistance Near the 40 and 60 Levels In figure 2, we can see that the GBPUSD found support and resistance when the RSI reading reached near the 40 and 60 levels, respectively.

Commodity Channel Index CCI The Commodity Channel Index CCI has the look and feel of the RSI indicator. While the RSI oscillates between 0 and , the CCI has no upper or lower limit. Figure 3: Trend Identification with the CCI Oscillator and Market Entry with Trend Line Breakout The easiest way to find market entry opportunities with the CCI would be combining it with price action based technical analysis, such as trendline breakouts.

Moving Average Convergence Divergence MACD The first three oscillators we discussed all use line charts to represent the reading. Figure 4: MACD Contrarian Divergence Market Entries The best way to use the MACD to find a market entry opportunity is to be a contrarian. Awesome Oscillator AO The Awesome Oscillator AO was created by the famous trader Bill Williams to measure the difference between the latest 5 periods Simple Moving Average SMA and 34 periods SMA.

Figure 5: Awesome Oscillator Bearish Twin Peak Market Entry To enter the market with a bearish AO Twin Peak, you need to wait for two consecutive peaks to form above the zero line, where the second peak is lower than the first one. Takeaway Oscillator indicators are great at finding direction and measuring the momentum of the directional movement of asset prices. Train Your Pattern Recognition To Become A Fluent Chart Reader. Trading is all about pattern recognition and the setups you trade are patterns with unique characteristics that allow you to.

I have a small notebook in which, over the years, I wrote down every time I heard something about trading. Let's talk about trading strategies and in this article, I am sharing 5 trading strategies that I use or have.

The trade idea I presented in my previous Tesla post linked did not work because price went lower on Thursday and pulled RSI down below 35 orange rectangle. My initial idea on 16 Nov. was for RSI to move higher from 35 as price rose. Instead RSI fell and stayed below 40 for two days remember this is a 30m frame , until the green candle in the final Friday Notice the series of higher lows since November 10, when earnings and revenue beat estimates.

The result is an ascending Matic Long 15 mins 4 Hour Oscillators all over sold Trend still bearish long term but bullish in short term. Vix is giving a Bullish RSI signal on the daily chart. A Bullish RSI Divergence is a lower price and a higher RSI value. The median RSI value for this years VIX bottoms is If helps you, please like and share. The end of an ascending channel and the beginning of a descending channel. As we can see the RSI indicator is in an overbought zone for some hours, however the MACD weren't strong enough to continue going up after crossing the signal line and went down again, so the candles continues to make HL and just two HH.

The BB moving average was crossed but just with two ETH good chance to buy here with price at support Stochastic signaling buy also Target is previous supply zone. Bull Flag formed With Short Consolidation this could move up fast. This is a quick 15 Mins Trade remember main Trend is still very bearish. Bullish Convergence slowly manifesting on Ethereum! Are we gonna go up soon? A number of reasons now exist to be bullish, but I'm needing the sleep so I'll let the chart do the talking on this occasion.

Is it possible price action falls further? Is it probable? Return: Don't know. A number of reasons now exist to be bullish, including: 1 A strong buy signal prints not shown. If you want to see it, just ask. The oscillators are printing lower lows as price action is next few weeks. A number of reasons now exist to be long, including: 1 A strong buy signal prints not shown.

Anyhoe, a number of reasons now exist to be bullish. Do not ignore on this time frame. Unlike regular bullish divergence , hidden bullish divergence occurs when oscillators prints lower lows as price Can you believe that?

The mind boggles. A number of reasons now exist to be bearish. Very bearish. PS: This is not a reflection on the entire alt-token market, idea on that coming soon! On the above 2-day Yes 1 Bitcoin becomes 90 Bitcoin. I recall seeing it but never published before now. Predictions and analysis. Videos only.

Oscillators are popular and widely used because they are leading indicators that can signal a possible trend change that is yet to start. This type of indicator oscillates between two limits, above and below a midpoint and its value helps to gauge the strength and momentum of a trend. Oscillators also typically signal if a market is overbought or oversold meaning price is unjustifiably high or unjustifiably low , which could point to a reversal of the trend.

This could be used to determine when to close open positions. Oscillators work best in ranging markets because in trending markets they can show overbought or oversold conditions too soon. Common things to look for are a midpoint cross, approaching maximum or minimum value and regular or hidden divergence. Oscillators are usually plotted with a line or histogram. There are many oscillators such as the Relative Strength Index , the Stochastic Oscillator , the True Strength Index and the Ultimate Oscillator.

OptionsRising Updated. Ascending Triangle in Ralph Lauren. TradeStation Broker. xc c njn longbf cv. PistolPeteno1 Pro. VIX Bullish RSI Divergence. Eth Pattern Spotted. AAVE - bullish divergence. Digibyte - about to fly through the roof.

Beta Finance BETA - About to fly through the roof. Secret SCRT - Hidden bullish divergence. Show more ideas.

VIX Bullish RSI Divergence. But, the underlying mathematical formula, as well as the application is completely different. Page Contents. To do so, instead of focusing on level 50, we can draw two additional lines, 40 and 60 on the RSI window. The indicator is detached from the price because the price and volume are done from the accumulation and distribution line , as shown above. In this article, we have looked at some of these indicators and the situations where they can perform best.

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