How are oscillators used in technical analysis?

December 5, 2022

Oscillators are a type of technical indicator used in financial markets to identify overbought and oversold conditions, forecast future market direction, and confirm trend strength. Oscillators are based on the assumption that prices move in cycles, and they use a variety of formulas and calculations to measure the momentum, volatility, and relative strength of a security or index. Some common oscillators used in technical analysis include the relative strength index (RSI), the stochastic oscillator, and the moving average convergence divergence (MACD) indicator. These indicators are displayed as lines or histograms on a chart and can provide valuable information to traders and investors.

“The truth knocks on the door and you say, “Go away, I’m looking for the truth,” and so it goes away. Puzzling.” – Robert M Pirsig

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