MVP Oscillator
The Main Ribbon
This oscillator analyses market trends and produces a blue and purple ribbon. A blue ribbon suggests the market is moving upwards and a purple ribbon suggests the market is moving downwards. This plot can be used classically and a user can easily use this for divergence identification. In this mode however divergences are not the main feature and would need to be manually identified.
Ranging between -100 and 100; this oscillator, when below 0, suggests the market is bearish and moving downwards. When above 0 the market is in a bullish state. Looking for confluence here is key. For example if the oscillator is below 0 and we see purple appearing on the ribbon; this could be a stronger sign the market will continue to move downwards. However; if it's below 0 and the oscillator turns blue; this could indicate indecision in the market.
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| The main wave on the MVP Oscillator |
Looking for when oscillator becomes overbought/oversold can also be a powerful trading tip. The blue and purple overbought and oversold lines show when the oscillator may be more likely to experience a reversal. For example if the oscillator is at -100 we may expect a reversal and bounce. If the oscillator is at or is approaching 100 we might be looking to short the market as a potential bearish reversal is coming.
Before trading a overbought or sold bounce; try to wait for a confirmation e.g. a crossover the oversold level or crossunder the overbought level.
The Green Bars
The main other component on the MVP oscillator are the overextended green bars that appear when a market reversal is due.
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| Green bars suggesting the market will soon reverse |
When the green bars appear the user can infer that the market may bounce around this region making it once again excellent when used in confluence with other tools from ChartPrime. Looking for these bars can indicate when a trader might want to be looking for some dynamic positions. Consider these a warning sign.
Signals
The MVP oscillator also has signals. These appear when the oscillator becomes overextended and displays arrows. These can serve as classical buy or sell signals when used in confleunce with other indicators.
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| Signals for buy/sell actions |
Looking for confluence with these signals can be a powerful idea. For example; in the image above we see a buy signal with green bars. This suggests the market is due a reversal and that reversal will most likely be a bullish one.