Ultimate Oscillator (UOS) for trend detection and entry points

How to use the Ultimate Oscillator (UOS) indicator in technical analysis on the cryptocurrency market. Identify the entry and exit points of the market with this powerful indicator and improve your trading strategies.

UOS IndicatorThe Ultimate Oscillator is an indicator for technical analysis that is used to measure momentum over three different time periods.


The main problem faced by pulse oscillators is the following: after a quick jump up or, conversely, after a drop down in price indicators, they often display unreliable divergence trading signals. Ultimate Oscillator strives to minimize errors. To do this, it uses several time intervals in its calculations, unlike other oscillators, which in most cases interact with only one.


How UOS worksUOS uses three different periods (7, 14 and 28) to determine the dynamics of short-, medium- and long-term market trends.


But it combines them by weighing to get a more reliable price momentum than the one you get from other oscillators based on the same time frame.


As is the case with most oscillators, UOS moves between 0 and 100. Indicators below the 30 mark are perceived as oversold, indicators above 70 are considered overbought.


Signals are formed only if there is a discrepancy between the current price and the indicator, but three criteria must be met.For example, in order for a buy signal to be generated, the following conditions must be met:


1. The formation of a bullish divergence, which means that the price indicator tends to the minimum level, but the indicator itself is located at a higher minimum.


The first minimum of the divergence is below the indicator of 30, that is, the divergence started from the oversold area and is likely to lead to a situation of a price reversal in the upward direction.3.   

The final oscillator rose above the divergence maximum — the highest point between the two minima.First you need to calculate the purchase pressure indicators.


The next step of the UOS begins to determine the sum of the ratio of the moving average of the purchase pressure value of each period to the interval of the same period. Ultimately, the final UOS formula looks like this: UO = RawUO/( fastk + middle + slow) *100.Buy and Sell signals


There are three points displaying buy signals.


Firstly, a divergence of "bulls" begins to form between the indicator itself and the price indicator of the currency. This suggests that the UOS forms a high minimum, as the price forms a lower minimum. A larger minimum in the oscillator shows a smaller downward momentum. Secondly, the minimum level of bullish divergence should be located below the 30 mark. This is done in order to ensure that prices are somewhat oversold or are at a relative limit. Third, UOS has risen above the bullish divergence maximum.


There are also three steps to sell signals. Firstly, a bearish divergence is forming between the indicator and the cryptocurrency price. This means that the UOS forms a lower maximum as the price forms a higher maximum. A lower maximum in the oscillator shows a smaller upward momentum. The maximum bearish divergence should also exceed the value of 70. This is done in order to ensure that prices are somewhat overbought or are at a relative limit. Third, the oscillator drops below the bearish divergence minimum to confirm the reversal.

The GRIN4 ecosystem

We have created a bot to make money on crypto exchanges. You set the settings, and he trades 24/7. Manage all assets from one service: with your own hands or with the help of algorithmic trading. Anonymously. Simply. Stress-free.