What Are Oscillators and Why We Need to Use Them

Technical Analysis Oscillators, one of the most interesting groupings of indicators and are designed to signal overbought and oversold levels. Oscillators are a family of indices that go beyond the mathematics. They focus on one important thing and that is momentum, or more specifically changing momentum. Oscillators fall into two categories, bounded and non-bounded and each serves their own purpose. We all know many by name, these include RSI (Relative Strength Index) and Stochastics. One of the most popular non bounded indicators is MACD which uses convergence and divergence to provide signals.

Using one indicator in conjunction with another is a very useful tool for determining the important entry/exit points. Using these indicators, you can see how professional traders can be in and out of trades long before the average investor, and you will also be able to find a comfortable trading range. 
 
Barry Norman
The Director of Investors Trading Academy as well as a published author and educator. Barry brings with him over 35 years of financial market knowledge and experience. He holds an MBA in Finance and Economics from UCLA and an undergraduate degree in Economics from the University of Maryland. Barry was award the title of “Best Education in Europe” by Global Banking & Finance. Barry is also a presenter for the MoneyShow and many well-known news sources.