PROTECTED SOURCE SCRIPT
M-Oscillator
Based on the research of Mohamed Fawzy, MFTA, CFTe and published in the IFTA Journal 2018.
The M-Oscillator is a bounded oscillator that moves between (-14) and (+14), it gives early buy/sell signals, spots divergences, displays overbought/oversold levels, and provides re-entry points, and it also work as a trend identifier.
Trading tactics
Overbought/Oversold:
We define the overbought area as anywhere above the 10 level. The oversold area is below -10. When the M-Oscillator goes above 10 (overbought) and then re-crosses it to the downside, a sell signal is triggered. When the M-Oscillator surpasses -10 to the downside and then re-crosses back above this level, a buy signal is triggered. This tactic is only successful during sideways markets; during an uptrend, the oscillator will remain in its overbought territory for long period of times. During a downtrend, it will remain in oversold for a long time.
Overbought/Oversold rule:
• Buy when the M-Oscillator violates the (-10) level to the downside and crosses back to the upside.
• Sell when the M-Oscillator crosses above the (+10) level and crosses back to the downside.
Divergence
Divergence is one of the most striking features of the M-Oscillator. It is a very important aspect of technical analysis that enhances trading tactics enormously; it shows hidden weakness or strength in the market, which is not apparent in the price action. A positive divergence occurs when the price is declining and makes a lower low, while M-Oscillator witnesses a higher low. A negative divergence occurs when the price is rising and makes a higher High, while the M-Oscillator makes a lower high, which indicates hidden weakness in the market. Divergences are very important as they give us early hints of trend reversal (weekly chart)
Divergence rule:
• Buy when the M-Oscillator witnesses a positive divergence with prices followed by a rise above (-10).
• Sell when the M-Oscillator witnesses a negative divergence with prices followed by a decline below (+10).
The M-Oscillator is a bounded oscillator that moves between (-14) and (+14), it gives early buy/sell signals, spots divergences, displays overbought/oversold levels, and provides re-entry points, and it also work as a trend identifier.
Trading tactics
Overbought/Oversold:
We define the overbought area as anywhere above the 10 level. The oversold area is below -10. When the M-Oscillator goes above 10 (overbought) and then re-crosses it to the downside, a sell signal is triggered. When the M-Oscillator surpasses -10 to the downside and then re-crosses back above this level, a buy signal is triggered. This tactic is only successful during sideways markets; during an uptrend, the oscillator will remain in its overbought territory for long period of times. During a downtrend, it will remain in oversold for a long time.
Overbought/Oversold rule:
• Buy when the M-Oscillator violates the (-10) level to the downside and crosses back to the upside.
• Sell when the M-Oscillator crosses above the (+10) level and crosses back to the downside.
Divergence
Divergence is one of the most striking features of the M-Oscillator. It is a very important aspect of technical analysis that enhances trading tactics enormously; it shows hidden weakness or strength in the market, which is not apparent in the price action. A positive divergence occurs when the price is declining and makes a lower low, while M-Oscillator witnesses a higher low. A negative divergence occurs when the price is rising and makes a higher High, while the M-Oscillator makes a lower high, which indicates hidden weakness in the market. Divergences are very important as they give us early hints of trend reversal (weekly chart)
Divergence rule:
• Buy when the M-Oscillator witnesses a positive divergence with prices followed by a rise above (-10).
• Sell when the M-Oscillator witnesses a negative divergence with prices followed by a decline below (+10).
Thông báo miễn trừ trách nhiệm
Thông tin và ấn phẩm không có nghĩa là và không cấu thành, tài chính, đầu tư, kinh doanh, hoặc các loại lời khuyên hoặc khuyến nghị khác được cung cấp hoặc xác nhận bởi TradingView. Đọc thêm trong Điều khoản sử dụng.