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Overbought/Oversold

 
Trade with the momentum on your side.  When an oscillator such as the Stochastics or the RSI is in oversold territory, it typically indicates that the selling pressure is exhausted and that prices might get ready to move to the upside or at least stop falling. Vice versa, when these oscillators are in overbought territory, it typically indicates that the buying pressure is exhausted and that prices might get ready to move to the downside or at least stop rising. When these conditions occur simultaneously on either 2 different oscillators or on the same oscillators on 2 different time frames, the likelihood of a price reversal greatly increases. Our Overbought/Oversold indicators spot overbought and oversold conditions on up to 2 oscillators on a single data series or on up to 2 different data series. They display show me dots and a text description above price highs for overbought conditions and they display show me dots and a text description below price lows for oversold conditions. The oscillators can be specified through indicator inputs. These indicators have the option of requiring both oscillators to be overbought/oversold before generating an alert or they can be set to alert for anyone oscillator to be overbought/oversold.

In a strong trending market, oscillators can remain in overbought/oversold territory for a long period of time before prices change direction and in order to signal a turnaround of prices, a cross of a faster oscillator is commonly used. For example, when the Stochastics D is in overbought territory and the faster oscillator Stochastics K crosses below the Stochastics D, it signals that prices may get ready to fall. Vice versa, when the Stochastics D is in oversold territory and the faster oscillator Stochastics K crosses over the Stochastics D, it signals that prices may get ready to rise. Other combinations of fast and slow oscillators would be an average of the CCI together with the CCI or an average of the MACD together with the MACD. Our Overbought/Oversold indicators contain a separate crossover oscillator for each one of the two oversold/overbought oscillators that can be used to require such crosses in order to trigger an overbought/oversold alert. For example, if a slow D is selected for the overbought/oversold oscillator and a slow K is selected for the Cross oscillator, then an oversold condition is displayed when the slow D is in oversold territory and the slow K crosses over the slow D.

The Alchemy Overbought/Oversold Indicator

The Alchemy Overbought/Oversold indicator spots overbought and oversold conditions on up to 2 oscillators on a single data series. It displays show me dots and a text description above price highs for overbought conditions and it displays show me dots and a text description below price lows for oversold conditions. The oscillators can be specified through indicator inputs. These indicators have the option of requiring both oscillators to be overbought/oversold before generating an alert or they can be set to alert for anyone oscillator to be overbought/oversold. The indicator contains a separate crossover oscillator for each one of the two oversold/overbought oscillators that can be used to require such crosses in order to trigger an overbought/oversold alert. For example, if a slow D is selected for the overbought/oversold oscillator and a slow K is selected for the Cross oscillator, then an oversold condition is displayed when the slow D is in oversold territory and the slow K crosses over the slow D.

The Alchemy Dual Data Overbought/Oversold Indicator

The Alchemy Dual Data Overbought/Oversold indicator follows the same format as the Alchemy Overbought/Oversold indicator except that it comes with a unique multi data Stochastics oscillator that can calculate the Stochastics on 2 different data series simultaneously.  It is designed to detect overbought/oversold conditions that simultaneously occur on either 2 different time frames or 2 different markets.  Besides the given Stochastics oscillator, any type of oscillator can be used for overbought/oversold detection through indicator inputs specifications, therefore making this indicator very flexible.

 

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Read More About

Bar Pattern Analysis

Breakout

Divergence

Engulfment & Reversal

Fibonacci Retracements

Floor Traders Mid Points

Floor Traders Pivot Points

Gap

High Low Mid Points

Intraday Time Zones

MACD Signal Line-%Ds Hook

Multiple Moving Averages Crossover

Open/High/Low/Close

Overbought/Oversold

Rolling Floor Traders Pivot Points

Strong Trend

Support & Resistance Pivot Points

Trailing Stop

Trend Catcher

 

 


     
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IMPORTANT INFORMATION:
Government regulations require disclosure of the fact that past performance, whether actual or indicated by historical tests of strategies or indicator methods, is no guarantee of future performance or success. There is a possibility that you may sustain a loss equal to or greater than your entire investment regardless of which asset class you trade (equities, options futures or forex); therefore, you should not invest or risk money that you cannot afford to lose. Any advisory or signal generated by Trading Alchemy indicators or strategies is provided for educational purposes only and any trades placed upon reliance on Trading Alchemy indicators or strategies are taken at your own risk for your own account. Consult your broker or advisor prior to making any investment decisions. The information made available on this Website is not an offer to buy or sell securities, securities derivative, futures products or off-exchange foreign currency (forex) transactions of any kind.  All proprietary technology of Trading Alchemy indicators and strategies is owned by Alchemy Trading Technologies, Inc.

 

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