How to Use Oscillators to Warn You of the End of a Trend?1 min read
The Williams %R, Stochastic, Parabolic SAR, and Relative Strength Index (RSI) are all oscillators.
Oscillators work under the premise that as momentum begins to slow, fewer buyers (if during an uptrend) or fewer sellers (if in a downtrend) are willing to trade at the current price.
A change in momentum is usually a sign that the present trend is weakening.
Each of those indicators is meant to signal a possible trend reversal, where the previous trend has run its course and therefore the price is prepared to vary direction.
An oscillator is an object that always moves back and forth from point A to point B. The oscillator indicator works during a way when momentum starts to hamper , fewer buyers if during an uptrend or fewer sellers if in a downtrend, will provides a signal to trade. The oscillator indicator giving signals of changes in momentum is usually a sign that the trend is currently weakening.
Each of the oscillator indicators is meant to signal the likelihood of a trend reversal, where the previous trend has gone and therefore the price is prepared to vary direction.