Andean Oscillator: Separate Bullish and Bearish Pressure with Ratcheting Envelopes
Summary
The Andean Oscillator is presented as a momentum and volatility indicator that tracks bullish and bearish pressure separately. It builds an upper and lower price envelope using EMA-style smoothing with one-way movement: the upper boundary can descend toward price, while the lower boundary can rise. It calculates each envelope from both price and squared price, then uses their difference to form bull and bear lines. The article provides a ProRealTime implementation and explains how crossovers, rising lines, and convergence may be interpreted.
A bull line above and rising relative to the bear line is described as bullish momentum; a bear-line crossover suggests growing bearish pressure. When both lines rise, volatility or transition may be increasing, while falling, converging lines may indicate consolidation. The length setting controls how quickly the envelopes adapt, with longer settings producing smoother but more delayed readings. These interpretations are heuristic: the document provides no backtest or performance evidence, and crossovers alone do not define a complete trading system or its risk controls.
Key ideas
- The indicator tracks bullish and bearish pressure with separate lines derived from ratcheting price envelopes.\nIts envelopes use EMA-style smoothing and move in only one direction.\nThe bull and bear lines are calculated from raw-price and squared-price envelope values.\nLine crossovers are presented as signals of changing relative pressure, not as a complete trading system.\nLonger lengths smooth the readings but increase lag, and the article provides no performance test.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.