Prime Oscillator
This oscillator consists of a main ribbon where red indicates a downtrend and green indicates an uptrend. These are various other features of this oscillator including the following:
Main Ribbon
The main ribbon is a clear and intuitive tool designed to gauge market sentiment and momentum. Structured as a ribbon that ranges between 0 and 100, when the ribbon's value is above 50, the market is considered to be in a bullish state, indicating an uptrend or increasing buying pressure. Conversely, a value below 50 signifies a bearish market, suggesting a downtrend or increasing selling pressure.
 |
|---|
| The main wave on the Prime Oscillator |
A key feature of this indicator is its color-coded system, which is there to assist in its interpretability. The ribbon changes color based on the market's condition: green indicates a bullish market, and red signals a bearish one.
The indicator primarily focuses on analyzing market momentum. By observing how the ribbon moves and changes color, traders can deduce the strength and potential sustainability of current market trends. This momentum analysis is further enriched by looking for confluence — when the ribbon's position (above or below 50) and its color (green or red) align, it provides a stronger signal regarding the market's direction.
Traders might use this indicator to identify potential entry and exit points, confirm trend strength, or as a component in a broader trading strategy. Its simplicity in design yet richness in information makes it a potentially valuable tool for various trading styles and market conditions.
Reversal signals
Reversal signals serve as a contrarian indicator, forecasting a potential change in the market direction and oscillator readings. The system's "peak seekers" are marked by blue dots and integrate data from multiple indicators, enhancing the accuracy and convergence in identifying divergences. These settings automatically adjust to the timeframe selected by the user.
 |
|---|
| The Peak Seeker signals |
The "momentum ribbon" is another feature that evaluates market volatility. It displays an actionable ribbon which forms the basis for further calculations. A twist in this ribbon often signals a possible shift in the market trend.
The system is also designed to efficiently detect divergences, ensuring that a broad range of potential market reversals are captured. This feature is particularly valuable for traders, as it aims to minimize the risk of overlooking key reversal signals.
Use confluence when trading reversals. These peak seeker dots are best used as part of a wider analysis system
OBOS Zones
The Prime Oscillator also shows clearly to traders the overbought or oversold zones. These are areas in the market where price is more likely to reverse and buyers or sellers may have exhaused themselves. These are displayed as orange OB or OS strips on the chart. Generally in seeing an OS label a trader should not be looking to short or sell the market. This suggests sellers are exhaused and buyers should soon appear in the market.
 |
|---|
| OBOS signals showing overextended areas of the market |
In seeing an OB label a trader should not be looking to buy. Generally here; buyers have exhaused themselves. This could be a good area in the market to take profit on a long position for example.
Just because a market is overbought or sold doesn't mean the market HAS to reverse. Buyers or sellers might continue coming into the market.
Automatic Divergences
The two types of divergences identified with the Prime Oscillator are:
Regular Bullish Divergences: This occurs when the price forms lower lows while the oscillator forms higher lows. It indicates a weakening downward trend and suggests a potential upward reversal. In a regular bullish divergence, even as prices continue to decrease, the oscillator's higher lows suggest diminishing bearish momentum.
Regular Bearish Divergences: This happens when the price creates higher highs, but the oscillator makes lower highs. It signals that the upward trend is losing momentum and might reverse into a downtrend. Regular bearish divergences are often seen as opportunities to short or exit long positions, as they suggest the bullish strength is waning.
 |
|---|
| Divergences automatically labelled on the oscillator |
When a bullish divergence is identified a green line will connect the troughs of the oscillator. This of course would suggest a bullish bounce may soon occur. When a bearish divergence is identified a red line will connect the peaks of the oscillator suggesting a pull back may soon occur in the market.
Bands
Enabled within the settings; the bands toggle shows a band around the oscillator. The band is split into two equal parts. The green area represents the oscillator climbing and the red area represents the oscillator falling. Looking at this can give an extra level of confluence when reading the oscillator's direction. The breaks of the band can also be enabled which can point at possible breakouts of momentum for traders.