Description:
The Ultimate Oscillator is a technical analysis tool widely used by traders and investors since its development in 1976 by Larry Williams. This indicator measures the price momentum of an asset across multiple timeframes and is based on the concept of divergences. In this article, we will explore the Ultimate Oscillator, how it works, and how it can be used in trading.
Input Parameters:
- Length 1, 2, 3: Number of periods used in the calculation.
- Lower: Presets to 70 which represents the upper boundary of the indicator.
- Middle: Presets to 50 which represents the middle boundary of the indicator.
- Upper: Presets to 30 which represents the lower boundary of the indicator.
Use Cases:
- Trend Identification: One common method is to use it as a trend-following indicator. The asset is in an uptrend when the Ultimate Oscillator is above a certain level, such as 50. Conversely, the asset is in a downtrend when the Ultimate Oscillator is below a certain level, such as 50.
- Overbought/Oversold Conditions: When the Ultimate Oscillator reaches a level above 70, this is considered overbought, and a sell signal may be generated. Conversely, when the Ultimate Oscillator reaches a level below 30, this is considered oversold, and a buy signal may be generated.
This feature can be used in:
- Market Scanner
- Strategy Tester
- Multi-Factor Alerts
- Smart Checklist
Do you want to learn more? Check out our Learning Center Article.