Oscillator Indicators. oscillare - oscillation parameters. They are used as indicators of differences in flat, when the oscillator and price move in opposite directions. When trading oscillators in flat support and resistance levels produce price band. Oscillator Indicators Condition oversold \ overbought is perhaps the most important indicator of the oscillator. Consider the most popular ones:
a) MACD Oscillator Indicators - Moving Average Convergence-Divergence) - convergence \ divergence moving averages.
The Oscillator Indicators was developed in the 70s of last century by Gerald Appel. Represents the difference between two moving averages as a histogram. In indicator is the line along which signals define the input or judged moderation \ change of trend.
There are 3 ways to determine trend MACD Oscillator Indicators -om:
1) The intersection with the signal line. When lowering Moving Average Convergence / Divergence below the signal line must be sold, when lifting above this line - buy it. Also signals a buy \ sell are MACD crosses the zero line down \ up.
2) Oversold \ overbought. When lifting short-term moving average is much higher than long (ie, when the MACD Oscillator Indicators rises), it is a signal to roll back because price too high
3) Discrepancies.
The divergence between price and MACD Oscillator Indicators indicates that the most likely ending to the current trend now. A bullish divergence occurs when the MACD new highs while the price does not reach them. A bullish divergence occurs when the MACD new lows and the price does not reach them. These types of differences have the greatest weight, if formed in the zones oversold \ overbought.
b) Stochastic Oscillator Indicators
The stochastic oscillator is a 2% K line, which is represented by a solid line and D% - dotted line. There are also levels, typically 20 and 80. Oscillator compares where a security's price closed relative to its price range for a certain time interval.
There are a number of trading Oscillator Indicators signals on it:
*) When both lines fall below the level indicator 20, and then turn around, crossed this line, you need to buy. Conversely, when lifting them above 80 and as soon as they cross the line again, sell.
*) When the line to sink below the% D% must be sold, when will rise above D% - buy it.
Least of all false alarms oscillator provides high timeframes.
c) Relative Strength Index (RSI) - RSI Oscillator Indicators.
This Oscillator Indicators determines the strength of the trend and the likelihood of change. He should pay the price. The values range from 0 to 100. He could draw the shape of technical analysis - the top, head and shoulders, triangle, etc. Developed in the 70s of last century, William Wilder.
When analyzing the graphs, consider the following Oscillator Indicators signals of the oscillator:
* Graphical models. By the way, the light can draw them, but at the price chart, they can not be displayed.
* Support and resistance levels. Data for this indicator levels are seen at times sharper than the price chart.
* The bases and tops. Typically, the base formed below 30 and above the top 70.
* Differences. They are formed when the price reaches a new low (high), but not confirmed by a new minimum (maximum) in the RSI.
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