Ultimate Oscillator

Ultimate Oscillator is a technical analysis indicator developed for trading the commodities markets by Larry Williams. The Ultimate Oscillator is designed to expand as the market gets stronger or weaker. 

Ultimate Oscillator

Ultimate Oscillator is a technical analysis indicator developed for trading the commodities markets by Larry Williams. 

 

Ultimate Oscillator Formula

The Ultimate Oscillator uses the weighted average of three different time periods to reduce the volatility and false transaction signals that are associated with many other indicators that mainly rely on a single time period. \the exact formula can be found here:  Larry Williams' Ultimate Oscillator.



Ultimate Oscillator Interpretation

The Ultimate Oscillator is designed to expand as the market gets stronger or weaker. For example, if the market shows a tremendous amount of strength the oscillator expands the time base, thereby not allowing the short term fluctuation to influence the fact that the market has turned the corner on a long-term basis.



Illustration of Price/Ultimate Oscillator divergences

Illustration of Price/Ultimate Oscillator divergences

The Ultimate Oscillator is used as a divergence indicator in addition to the typical overbought/oversold oscillator signal generation.

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