The oscillator of moving average (OsMA)The oscillator of moving average (OsMA), is an indicator tha... More, is an indicator that shows the momentum of price actionWhat is price action in trading? Price action describes the ... More.
It is calculated by taking the difference between a shorter-term and a longer-term moving averageWhat is a moving average indicator? In technical analysis, ... More.
The two most common are the 12-period moving average and the 26-period moving averages. Because of this, it is best described as a modification of the indicator.
A cross through the zero or centre line can be a very simple way to decide if momentum is gaining to the side, or if it is falling to the side. Traders will use the side of the line that the histogram is on to help them decide which direction they want to be in a particular marketWhat are value stocks? A value company is a company that app... More.
The OsMA essentially indicates when a security is or , or when a new trendWhat is a market trend in trading? A market trend is the ten... More is forming.
OsMA calculated from the MACD
Using the calculations derived from the MACD, the OsMA number_1 indicator is plotted as shown in the illustration below.
The below shows a EUR/USD with an OsMA indicator displayed underneath.
When the oscillator approaches the upper extremes of the indicator 1, it shows that the could be overbought. When it approaches the lower extremes, it indicates that the asset could be oversold 2.
Usually, when the indicator turns from positive to negative, it shows that a downtrend could be starting to form 3. When the indicator turns from negative to positive, it can indicate that an uptrend could be starting to form 4.
Further reading
Find out more about the OsMA and how to use indicatorsIndicators In technical analysis, an indicator is a tool th... More to suit your trading style:
Learn how to read charts using technical analysisWhat are the principles of technical analysis? Technical ana... More:
