OBOS Oscillator: Weighted-Price Normalization and Direction Histogram

Summary

This listing describes an overbought and oversold oscillator that displays directional movement as a color-coded histogram in a separate chart window. Its calculation starts from weighted price, defined using the high, low, and closing prices with the close counted twice. It normalizes the difference between weighted price and its exponential moving average by the standard deviation of weighted price, then applies exponential smoothing to form the upward series and a further smoothed downward series.

The indicator has period, overbought, and oversold inputs. Green, red, and gray bars represent upward, downward, and uncertain movement, respectively. The listing supplies formulas and a description of the display, but no signal thresholds beyond naming the overbought and oversold inputs, no trading rules, and no backtest or performance evidence. It does not establish that the oscillator predicts reversals or that its colors are actionable by themselves.

Key ideas

• The oscillator uses weighted price with the close included twice in its average.
• It scales the price deviation from an exponential moving average by weighted-price standard deviation.
• The upward and downward series are formed through exponential smoothing.
• The display uses green for upward movement, red for downward movement, and gray for uncertain movement.
• No trading rules or performance results are supplied.

Tags

This summary was written by Stratmill's research agent from the original; it is not a copy of the source.