The Oscillator Predictor is a derivative of a Detrended Oscillator. Through a set of parametric equations, a predicting oscillator is created that forecasts, one period ahead of time, overbought and oversold conditions.
The resulting predictor values are expressed as bands on the bar chart, both above and below the market.
If desired, you can show the detrended oscillator from which they are derived below the chart by setting up a standard oscillator study (OSC) using the same Period parameters as used in the Oscillator Predictor. The Predictor bands may be used in a variety of ways to aid in entering and exiting the market.
Although Joe DiNapoli recommends that the study be created from daily data, the resulting levels can be particularly useful for intra-day trading. The flexibility afforded by CQG programming of this study opens many interesting avenues of research.
Oscillator Predictor Parameters
•Display
•Period: Selects the value of the Moving Averages from which the Detrended Oscillator is created.
•PeakStrength: Number of values on either side of a high (low) that must be lower (higher) in order for the high (low) to qualify as a peak (trough).
•Price: Selects the value of the bar from which the oscillator is created.
•Lookback: Selects the total number of bars the study evaluates for peak selection.
•Samples: Selects the number of peaks the study evaluates for overbought-oversold analysis.
•OB/OS Level: Selects the percentage value of average OB/OS used to calculate the predictor OB/OS levels.
•Custom Levels: When this box is checked the predictor is calculated based on the values specified in Custom OB and Custom OS fields, instead of based on a percentage of average OB/OS.
•Custom OB: Selects a user-preferred value for overbought.
•Custom OS: Selects a user-preferred value for oversold.