Oscillator

What is an 'Oscillator'

An oscillator is a technical analysis tool that is banded between two extreme values and built with the results from a trend indicator for discovering short-term overbought or oversold conditions. As the value of the oscillator approaches the upper extreme value the asset is deemed to be overbought, and as it approaches the lower extreme it is deemed to be oversold.

BREAKING DOWN 'Oscillator'

Oscillators are most advantageous when a clear trend cannot be easily seen in a company's stock such as when it trades horizontally or sideways. The most common oscillators are: the Stochastic oscillator, RSI, ROC and MFI.

RELATED TERMS
  1. Oversold

    1. A condition in which the price of an underlying asset has ...
  2. Overbought

    1. A situation in which the demand for a certain asset unjustifiably ...
  3. Chande Momentum Oscillator

    A technical momentum indicator invented by the technical analyst ...
  4. OsMA

    An abbreviation for Oscillator - Moving Average. OsMA is used ...
  5. StochRSI

    An indicator used in technical analysis that ranges between zero ...
  6. Williams %R

    In technical analysis, this is a momentum indicator measuring ...
Related Articles
  1. Active Trading

    An Introduction To Oscillators

    Find out how this indicator may help improve the average investor's entry and exit points.
  2. Forex Education

    Stochastic Oscillator

    The idea behind this indicator is that the closing prices should predominantly close in the same direction as the prevailing trend.
  3. Insurance

    Exploring Oscillators and Indicators: Stochastic Oscillator

    By Chad Langager and Casey Murphy, senior analyst of ChartAdvisor.com The stochastic oscillator is another well-known momentum indicator used in technical analysis. The idea behind this indicator ...
  4. Fundamental Analysis

    What Does Oversold Mean?

    The term oversold has several applications for an asset’s price.
  5. Investing

    Use The Percentage Price Oscillator: The "Elegant Indicator" For Picking Stocks

    Technical analysis is basically an attempt to disprove the credo that "Past performance is not indicative of future results." The percentage price oscillator, which measures momentum, is among ...
  6. Trading Strategies

    Beginner's Guide To Stockcharts.com: Indicators

    Indicators are calculations based on price and volume history of a ticker. There are many different indicators, each with a unique formula used to measure such things as volatility, momentum, ...
  7. Trading Strategies

    Relative Strength Index (RSI)

    Learn more about this technical momentum indicator that determines whether an asset is overbought or oversold.
  8. Technical Indicators

    Overbought Or Oversold? Use The Relative Strength Index To Find Out

    The Relative Strength Index comes in handy when identifying areas that are potentially overbought or oversold.
  9. Trading Strategies

    Technical Analysis: Indicators And Oscillators

    By Cory Janssen, Chad Langager and Casey MurphyIndicators are calculations based on the price and the volume of a security that measure such things as money flow, trends, volatility and momentum. ...
  10. Technical Indicators

    Overbought Or Oversold? Using The RSI To Find Out

    The Relative Strength Index is a technical indicator that measures the velocity and magnitude of changes in a stock’s price.
RELATED FAQS
  1. How do you know where on the oscillator you should make a purchase or sale?

    Learn more about oscillator indicators, technical momentum measures that are used by traders to predict potential market ... Read Answer >>
  2. What precisely is a stochastic oscillator meant to predict?

    Gain a basic understanding of the stochastic oscillator and how this technical indicator is designed to predict reversals ... Read Answer >>
  3. How do I read and interpret an Stochastic Oscillator?

    Understand the basics of the stochastic oscillator and how analysts and traders use this measure of trend momentum to predicts ... Read Answer >>
  4. What are the most common momentum oscillators used in day trading?

    Take a look at some commonly used momentum oscillators that can also be used for intraday trading, such as stochastic oscillators ... Read Answer >>
  5. What is a common strategy traders implement when using the Ultimate Oscillator?

    Learn what the ultimate oscillator is and find out about a common strategy traders use with the oscillator to signal entries ... Read Answer >>
  6. How do I use Stochastic Oscillator to create a forex trading strategy?

    Learn about the stochastic oscillator and how to it is used to create an effective forex trade strategy, including how to ... Read Answer >>
Hot Definitions
  1. Law Of Demand

    A microeconomic law that states that, all other factors being equal, as the price of a good or service increases, consumer ...
  2. Cost Of Debt

    The effective rate that a company pays on its current debt. This can be measured in either before- or after-tax returns; ...
  3. Yield Curve

    A line that plots the interest rates, at a set point in time, of bonds having equal credit quality, but differing maturity ...
  4. Stop-Limit Order

    An order placed with a broker that combines the features of stop order with those of a limit order. A stop-limit order will ...
  5. Keynesian Economics

    An economic theory of total spending in the economy and its effects on output and inflation. Keynesian economics was developed ...
  6. Society for Worldwide Interbank Financial Telecommunications ...

    A member-owned cooperative that provides safe and secure financial transactions for its members. Established in 1973, the ...
Trading Center