In this article, I’ll tell you about a tech-analysis tool that is poorly written. It is used by many traders. This is the forex oscillator SVS. Beginner traders sometimes ask: what is the difference between an oscillator and an indicator? For those of you who have that question, I’ll explain. Indicators reflect the current market situation and form signals based on the analysis performed. For objective reasons, they are very often late. Oscillators work according to a different algorithm, which allows you to predict further price behavior.
And now let’s move on to SVS Oscillator. It is inherently a popular Alligator theanalysis tool. But presented as a histogram. Depending on how the Alligator’s moving averages are arranged, SVS draws columns of different sizes and colours. Their evaluation allows a trader to make a corresponding trading decision.
In the chart forex oscillator SVS may look like this:
Now let’s see what the colors point to.
Blue bars signal a possible upward movement. Red indicates a probable downward movement. Brown is a sign of increasing upward movement, green is descending. However, all these “color” signals are not decisive. They can only be perceived as additional factors in favor of a particular trading solution.
Variants of using the oscillator in trading
They are only three. But each option is worth using in its own trading.
Level crossing
This trading solution can be made by crossing the bar chart with a zero value. If it happens in the top-down direction, we sell it. The deal is opened immediately after the formation of the column below zero level. SL is placed just above the nearest max.Example:
By analogy, but with appropriate corrections, open buy. orders
Divergence
If the price continues to rise and the oscillator bars begin to decline, this indicates a possible change in the direction of movement. We’re looking at sales.Example:
As shown in this example, there are additional factors in favor of sales other than divergence. The histogram has crossed the level “0” from top to bottom and has a red color.
Trend
This option is suitable for those who prefer careful trading. Deals are opened exclusively by trend. The signal is a rollback of the histogram to the zero level.Example:
And if we still observe the corresponding color (brown in my example), we can trust this signal more.
The use of SVS oscillator in real trading requires skills in working with it. You can do that on a demo account.Download forex oscillator:SVS_OscillatorFyodorov’s Inga06.02.2019