Ultimate oscillator
The ultimate oscillator is a theoretical concept in finance developed by Larry Williams as a way to account for the problems experienced in most oscillators when used over different lengths of time.
Overview
The ultimate oscillator is a theoretical concept in finance developed by Larry Williams as a way to account for the problems experienced in most oscillators when used over different lengths of time.
The oscillator is a technical analysis indicator based on a notion of buying or selling "pressure" represented by where a day's closing price falls within the day's true range. The calculation starts with "buying pressure", which is the amount by which the close is above the "true low" on a given day. The true low is the lesser of the given day's trading low and the previous close.
bp
=
close
− min (
low
,
previous close
)
{\displaystyle {\text{bp}}={\text{close}}-\min({\text{low}},{\text{previous close}})}
The true range (the same as used in average true range) is the difference between the "true high" and the true low above. The true high is the greater of the given day's trading high and the previous close.
tr
= max (
high
,
previous close
) − min (
low
,
References
Ultimate Oscillator at Tradersdaytrading.com The Ultimate Buy Signal, Motley Fool
Further reading
The Ultimate Oscillator, by Larry Williams, Technical Analysis of Stocks and Commodities magazine V.3:4 (140–141) (introduction)
Wikipedia contributors · Ultimate oscillator · revision 1340651916 · CC BY-SA 4.0 · Plain text extracted and formatting adapted; tags derived from linked topics.