Forex Oscillators | Forex Technical Analysis | IFCM New Zealand

Forex Oscillators: Forex Technical Analysis

The name of oscillator derives from the Latin word oscillo which means “I swing”. In technical analysis oscillator is the mathematical expression of the speed of price movements over time. By their form oscillators are advanced indicators.
Basic concepts of using oscillators are the overbought and oversold conditions of market. The market is considered overbought when the price is near its upper limit, and its further improvement is unlikely. Oversold zone is characterized by such a low price, that at the given moment its further downturn is unlikely. Although the analysis and use of oscillators best of all are represented at the constant state of market, the time of trend reversal can also be determined by their help.
To identify a trend reversal it’s necessary to understand the concepts of convergence and divergence of the curve oscillator with the direction of price movements.

  • Average True Range

    The ATR is used with 14 periods with daily and longer timeframes and reflects the volatility values that are in relation to the trading instrument's price. Low ATR values would normally correspond to a range trading while high values may indicate a trend breakout or breakdown.

  • Bollinger Bands Explained

    Bollinger Bands are among the most reliable trading indicators that traders can choose from. In contrast to most other indicators, Bollinger Bands indicator is a non-static, but dynamic indicator which means that it adapts to new market conditions, changing its shape based on recent price action and measuring momentum and volatility. Thus, Bollinger Bands have benefits over other standard indicators.

  • Commodity Channel Index Indicator - CCI Indicator

    Commodity Channel Index indicator oscillates around the naught line tending to stay within the range from -100 to +100. The naught line represents the level of an average balanced price. The higher the indicator surges above the naught line the more overvalued the security is. The further the CCI indicator plunges into the negative area the more potential for growth the price may have. Still the unbalanced price alone may not serve as a clear indicator neither to the direction the price is following nor to its strength.

  • DeMarker Indicator - DeM Indicator

    DeMarker indicator fluctuates with a range between 0 to 1.

  • Envelopes Indicator - Moving Average Envelope

    The Envelopes indicator consists of two SMAs that together form a flexible channel in which the price evolves. The averages are plotted around a Moving Average in a constant percentage distance which may be adjusted according to the current market volatility. Each line serves as a margin of the price fluctuation range.

  • Force Index Indicator - What is Force Index

    The Force Index allows to identify the reinforcement of different time scale trends:

  • Ichimoku Indicator - Ichimoku Clouds

    The Ichimoku indicator consists of five lines which may all serve as flexible support or resistance lines, whose crossovers may as well be assumed as additional signals:

  • MACD Indicator - Moving-Average Convergence/Divergenc

    Three main signals generated by the MACD indicator (blue line) are crossovers with the signal line (red line), with the x-axis and divergence patterns.

  • Momentum Indicator: Forex Oscillator

    The momentum indicator is represented by a line, which oscillates around 100. Being an oscillator, momentum should be used within price trend analysis.

  • Relative Vigor Index - RVI Indicator

    The Relative Vigor Index allows to identify the reinforcement of price changes (and therefore may be used within convergence/divergence patterns analysis):

  • Relative Strength Index - What is RSI

    The Relative Strength Index allows to identify possible overbought and oversold areas, but should be considered within trend analysis:

  • Stochastic Oscillator - What is Stochastic

    The Stochastic oscillator allows to identify possible overbought and oversold areas, but should be considered within trend analysis:

  • Williams Percent Range - What is %R

    The main goal of Williams Percent Range is to identify possible overbought and oversold areas, however the indicator should be considered within trend analysis: