Oscillators

Oscillators are indicators that are banded between two extreme values and used for discovering short-term overbought or oversold conditions.

Oscillators

Oscillators are indicators that are banded between two extreme values and used for discovering short-term overbought or oversold conditions.

 


Interpretation of Oscillators

As the value of the oscillator approaches the upper extreme value the asset is deemed to be overbought, and as it approaches the lower extreme it is deemed to be oversold. The most common oscillators are: the Stochastic Oscillator, RSI, ROC and MFI.

Stochastic Oscillator illustrating overbought and oversold conditions

Stochastic Oscillator illustrating overbought and oversold conditions



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