53 Ultimate Oscillator

UO is used to measure momentum across three varying timeframes. It reduces the chances of false signals common to other oscillators.

Function: Buying Pressure (BP) = Close - Minimum (Lowest between Current Low or Previous Close) True Range (TR) = Maximum (Highest between Current High or Previous Close) - Minimum (Lowest between Current Low or Previous Close)

Average7 = (7 Period BP Sum) / (7 Period TR Sum) Average14 = (14 Period BP Sum) / (14 Period TR Sum) Average28 = (28 Period BP Sum) / (28 Period TR Sum)

UO = 100 x [(4 x Average7)+(2 x Average14)+Average28]/(4+2+1)

The primary trading signals generated by the Ultimate Oscillator are bullish and bearish divergences.

Figure 8.71: Ultimate Oscillator