McClellan Oscillator Technical Analysis and McClellan Oscillator Signals
Developed by McClellan.
The McClellan Oscillator is an indicator that's based on smoothing the difference between the number of bullish candles & bearish candlesticks. This technical indicator looks similar to the traditional MACD.
McClellan Oscillator
FX Technical Analysis & How to Generate Signals
This Oscillator is a momentum indicator that can be traded in the same way as the MACD indicator. There are Three techniques that McClellan Oscillator can be used to generate trading signals.
Zero Center Line FX Crossover Forex Trading Signals:
Bullish Signals- When the oscillator crosses above zero center-line a buy signal is given.
Bearish Signals- When the oscillator crosses below zero center-line a sell signal is given.
Technical Analysis in Forex Trading
FX Divergence Forex Trading Signals:
Looking for divergences between the McClellan Oscillator and price can prove to be very effective in spotting the potential reversal and/or trend continuation points in price movement.
There are several types of divergences:
Classic FX Divergence (Regular FX Trading Divergence)
- Bullish Divergence: Lower lows in price action & higher lows in the McClellan Oscillator.
- Bearish Divergence: Higher highs in price & lower highs in the McClellan Oscillator.
Hidden FX Trading Divergence
- Bullish Divergence: Higher lows in price action & lower lows in McClellan Oscillator.
- Bearish Divergence: Lower highs in price action & higher highs in McClellan Oscillator.
Overbought/Oversold Levels on Technical Indicator
The McClellan Oscillator is also used to identify potential overbought and oversold levels in price action movements. The overbought and oversold conditions are generated when the oscillator moves to extreme levels on one side and starts to turn, however, in a strong trending market the oscillator will stay in the overbought and oversold levels for a long time. It is not recommended to trade overbought and oversold levels to generate trading signals. Best signal to use is the Centerline cross over signals to generate trading signals.
