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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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