OsMA indicator


OsMA indicator description

# Forex indicators , # Forex strategies

OsMA (Oscillator of Moving Average) indicator is an indicator of technical analysis, so to speak, of medium complexity. Its other name is the moving average oscillator. In fact, this is the same MACD, but supplemented by a smoothing line or, as it is also called, a signal line. The resulting value of the indicator of the moving average oscillator will be the difference between the MACD and the Moving Average (signal line). Formula OsMA Oscillator of Moving Average: OsMA = MACD – SIGNAL

The Moving Average Oscillator is built in the form of an intuitive histogram. As you may have already guessed, if the histogram bars are above the zero mark, this means the MACD value is greater than the MA value (Moving Average). When the histogram bars are in the negative zone, accordingly, the opposite is true. If the bars increase their size over time, it does not matter in which zone of the indicator is positive or negative, this indicates an increase (increase) in the gap between MACD and MA. Which usually indicates the prevalence of bulls or bears in the market, depending on the direction of the main movement. For example, a trading instrument began to grow from candle to candle, while the OsMA histogram is in the negative zone. In such a situation, we’ll see smaller columns which will seek to go from the negative to the positive and begin to grow there. And vice versa, under reverse conditions.

The OsMA indicator, in spite of its obvious similarity to MACD, has a number of differences and advantages, important and significant, but first things first.

When working on the market using the OsMA indicator, you must clearly understand what and why the indicator shows. Then you can make the right decisions based on logic, not speculation. The Moving Average of Oscillator (OsMA) is an indicator that, in addition to the basic simple idea of using any oscillator, a transition from zone to zone, that is, from minus to plus and vice versa, as well as analysis of convergence and divergence, can help in another very important task, namely, in tracking the balance of power of bulls and bears in the market. Understanding the mood of the players making the right decision is easier. Also, the Moving Average of Oscillator is very good when you need to find a point in the market to increase the current already open position. Think carefully about this, at first glance, a difficult paragraph.

Like any other technical indicator, the Moving Averages of the Oscillator has its negative sides. Do not use it on small time periods, there will be too many false signals, try to work on charts from an hour or more.

Adding OsMA indicator in MT

OsMA oscillator is included in the standard equipment of MT4 and MT5 trading platforms. To add it to the chart of the trading instrument, open the “Insert / Indicators /” menu

OsMA indicator parameters

Moving Average of Oscillator, OsMA

As elsewhere in the parameters of this indicator, you can adjust the frequency and external display. As always, it is not recommended to change something just like that, until you fully understand how OsMA works and why. You can configure the signal line period and MACD periods.

Trading system

Trading OsMA Moving Averages is quite simple. As mentioned above, there are several types of signals for this indicator:

1. The divergence / convergence of the values (directions) of the histogram and price chart, that is, divergence and convergence;

2. The intersection of the zero mark of the indicator.

You can also try to trade the balance of power of players, that is, buy when the strength of the bulls grow, sell when the bear. But remember, this is a complex tactic, it has been practiced for years. This should try to deal with already experienced businessmen, not beginners. So let’s dwell on the main types of signals and consider simple trading tactics.

Transaction for sale:

1. The histogram crosses the zero mark down – sell;

2. Set Stop Loss higher by 3-5 points from the previous local extremum;

3. Close the deal when a return signal has formed.

For a purchase transaction, the reverse is true.

A few simple rules in conclusion

Remember, there are no indicators on Forex that are not mistaken. OsMA indicator, like any others, requires confirmation of its signals. When building your own trading system, use several indicators.

Follow Mani Management. Never in one transaction risk more than 2 percent of your capital. This approach will protect you from ruin and allow you to consistently make money on Forex using OsMA.

Follow your trading strategy clearly. If according to the OsMA strategy (you need to open a deal – open, if you fix the result – fix it, and it does not matter if you are in the black. If you follow the rules of the Moving Average Oscillators “from and to” you can earn money.

Moving Average of Oscillator, OsMA for MT4 can be downloaded here

Moving Average of Oscillator, OsMA for MT5 can be downloaded here

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