Extra indicators
Ultimate Oscillator
A momentum oscillator that blends three time frames (7, 14 and 28 candles) to reduce false signals.
The idea in plain words
Single-period oscillators can be fooled by short bursts. Combining short, medium and long windows gives a more balanced view of buying pressure.
How it is calculated
Buying pressure is the close minus the lower of today's low and yesterday's close. It is compared with the true range over three windows and combined with weights 4, 2 and 1.
BP = close − min(low, previous close), TR = max(high, previous close) − min(low, previous close)
Avg7 = ΣBP ÷ ΣTR over 7 (likewise 14, 28)
UO = 100 × (4 × Avg7 + 2 × Avg14 + Avg28) ÷ 7How to use it
- Below 30 then a bullish divergence: Williams' buy setup; above 70 then a bearish divergence: sell setup.
Drawing conclusions
- Designed around divergences rather than simple levels.
Example
The price makes a lower low but UO makes a higher low around 28, then rises above the divergence high: a buy signal.
Prices in examples are illustrative.
Watch out for
- Signals are rare by design.
A little history
Larry Williams developed it in 1976 and published it in 1985.
Educational content only. No indicator or pattern predicts the future, and nothing here is investment advice.