Oscillator of a Moving Average (OsMA)
Candlefocus EditorWhen the OsMA is positive it helps verify an up trend; similarly, when the OsMA is negative it confirms that there is a down trend. An increase in the OsMA confirms that prices are going up while a decrease suggests that they are heading lower. Traders typically take the following into consideration when using the OsMA to identify potential trends: when the OsMA moves from negative to positive, this often indicates that an uptrend is beginning and vice versa.
The OsMA is plotted on the same chart as its corresponding oscillator, allowing traders to easily identify potential trends and make informed trading decisions quickly. As the OsMA rises or falls, it may indicate whether a trend will become more or less strong in the near future. It also allows traders to determine how strong the trend is and which direction it is most likely headed. Traders should be aware that an increase or decrease in the OsMA does not always guarantee an immediate trend change.
In summary, the OsMA is a valuable technical analysis tool that helps traders identify potential trends and evaluate the strength of existing trends. It measures the distance between an oscillator and its moving average, with increasing and decreasing OsMAs confirming bullish and bearish trends respectively. It allows traders to quickly spot and confirm price trends and make better trading decisions.