What is the Ultimate Oscillator?
The Ultimate Oscillator is a technical indicator developed by Larry Williams in 1976 to measure the price momentum of an asset over multiple time frames. By using a weighted average of three different timeframes, the indicator has less volatility and trading signals than other oscillators that rely on a single timeframe. Divergence generates buy and sell signals. Due to its multi-time frame structure, the final oscillator produces less divergent signal than other oscillators.
Transaction view.
key takeaways
- The indicator uses three time frames in its calculations: 7, 14 and 28 periods.
- Shorter timeframes have the most weight in the calculation, while longer timeframes have the least weight.
- A buy signal occurs when a bullish divergence occurs, with the divergence low below 30 on the indicator, and then the oscillator rises above the divergence high.
- A sell signal occurs when a bearish divergence occurs, the divergence high is above 70, and then the oscillator breaks below the divergence low.
The formula for the ultimate oscillator is:
Related Posts
A Beginner’s Guide to the Bloomberg Terminal
If you currently work in the financial industry, or have an ambition, chances…
1031 Exchange Rules: What You Need to Know
In real estate, a 1031 exchange is the exchange of one investment property for…
What is the gold standard?
The gold standard is a monetary system in which a country's currency or…
4 reasons to borrow money from a 401(k)
The financial media has coined some derogatory terms to describe the pitfalls…
cash flow
What is cash flow? The term cash flow refers to the net amount of cash and cash…
capitalism
What is capitalism? Capitalism is an economic system in which private…
Structural vs Cyclical Unemployment: What’s the Difference?
Structural and Cyclical Unemployment: An Overview Unemployment is the result of…
Optimal use of financial leverage in the company’s capital structure
A company needs financial capital to run its business. For most companies,…
Uber’s story
Uber Technologies Inc. (UBER)'s explosive growth and ongoing controversy…
Capital gains tax on home sales
2022 long-term return on capital application status 0% tax rate 15% tax rate…
How SBA Loans Can Help Your Small Business
Whether you're looking for financial help for your small business in…
The most common housing mistakes
Buying a home is a very emotional process. If you allow these emotions to play…