Oscillators

Oscillators

In the previous part of our tutorial, we’ve looked through the most popular trend technical indicators. The thing is that most of the time prices are meandering without a certain direction (they are ranging). While this directionless price movement drives some traders crazy, others manage to make a living on these roundabouts. Traders have a Plenty’s Horn of technical tools for trading ranging market. These tools are called oscillators. We will fill you in on the most popular ones.

Oscillators help us to identify pivotal points of the market – potential reversal areas. These indicators are banded between 2 extreme values indicating overbought and oversold areas. When the oscillator is in the overbought area, it means that the force of the bullish move has weakened and a reversal to the downside is likely. Accordingly, when the oscillator is in the oversold area, it means that the sellers have become weaker and the trend is likely to reserve up. 

Trade with oscillators

Trading with oscillators is based on the recurrence principle: after hitting an extreme value, the oscillator always returns to its central reading. However, there’s a big difference between the dynamics of the price and the oscillator: although they move in tandem with each other, these moves have different proportions. As a result, when the indicator returns to its normal value, the prices usually don’t return to the same point.  

Oscillators are most effective when the prices move sideways. As the purpose of all oscillators is the same, there’s little point in adding several oscillators to one chart. Use oscillators in combination with other technical tools.

We recommend you to choose default MT4 settings for the indicators, as these parameters were proposed by the creators of these tools.   

EUR CAD H1 chart

How oscillators work

FBS analyst Elizabeth Belugina will explain how oscillators work and how you can apply them

Frequently asked questions

  • How to open an FBS account?

    Click the ‘Open account’ button on our website and proceed to the Personal Area. Before you can start trading, pass a profile verification. Confirm your email and phone number, get your ID verified. This procedure guarantees the safety of your funds and identity. Once you are done with all the checks, go to the preferred trading platform, and start trading. 

  • How to withdraw the money you earned with FBS?

    The procedure is very straightforward.  Go to the Withdrawal page on the website or the Finances section of the FBS Personal Area and access Withdrawal. You can get the earned money via the same payment system that you used for depositing. In case you funded the account via various methods, withdraw your profit via the same methods in the ratio according to the deposited sums.

  • How to start trading?

    If you are 18+ years old, you can join FBS and begin your FX journey. To trade, you need a brokerage account and sufficient knowledge on how assets behave in the financial markets. Start with studying the basics with our free educational materials and creating an FBS account. You may want to test the environment with virtual money with a Demo account. Once you are ready, enter the real market and trade to succeed.

  • How to activate Level Up Bonus?

    Open Level Up Bonus account in web or mobile version of FBS Personal Area and get up to $140 free to your account.

Latest news

Which companies will publish EPS on April 19-23?

In this article, you'll find the list of the hottest stocks to trade on April 19-23, which will publish their earnings!

Citi: strategic change ahead?

While Citigroup reports better-than-expected quarterly data, it is also aims at restructuring its global presence. What will be the impact?

Markets after US retail sales

What's moving markets on Friday? What is the hottest news? Let's find out!

Deposit with your local payment systems

Learn more

Data collection notice

FBS maintains a record of your data to run this website. By pressing the “Accept” button, you agree to our Privacy policy.

Follow us on Facebook

Callback

A manager will call you shortly.

Change number

Your request is accepted.

A manager will call you shortly.

Next callback request for this phone number
will be available in 00:30:00

If you have an urgent issue please contact us via
Live chat

Internal error. Please try again later

Don’t waste your time – keep track of how NFP affects the US dollar and profit!

You are using an older version of your browser.

Update it to the latest version or try another one for a safer, more comfortable and productive trading experience.

Safari Chrome Firefox Opera