YujiYokooFX

28 lug 2023

YujiYokooFX Oscillator

https://www.tradingview.com/x/jOl3C92z/

Class: oscillator
Purpose: reversal trading
Period: any

Idea of the Indicator

Technical analysis often uses indicators to predict price behaviour, with trend indicators being based on price trends and oscillators on price reversals. Two of the most popular oscillators are known as “Momentum” and “Relative Strength Index” (“RSI”) respectively. Have you ever seen their formulas? Take your time and you will see none of them can provide any useful information about future prices. Both of them are simply random algorithms which can only generate random results.

Still academicians have developed a lot of really working methods: different types of time series models (AR – autoregressive models, ARMA - autoregressive–moving-average, ARIMA - autoregressive integrated moving average, VAR - vector autoregression, etc.) can be estimated to predict future prices

“YujiYokooFX Oscillator” is an academic style indicator based on ARIMA model.

It uses autoregressive integrated moving average technics to calculate the theoretical price of the asset and compare it with the actual price. This price difference is used to define whether current prices are overbought or oversold.

Structure of the Indicator

Indicator consists of two oscillatory lines: main (blue colored) and signal (red colored). Overbought and oversold zones are indicated with black dotted horizontal lines.

Rules of trading

Rules of trading are typical for oscillators.

• When the oscillatory line enters the overbought zone – long positions should be closed and after line leaves the overbought zone short position should be opened.
• When the oscillatory line enters the oversold zone – short positions should be closed and after line leaves the oversold zone long position should be opened.

Signal line is used to reduce the level of noise in the oscillatory line dynamics.

In order to ease the trading purposes “YujiYokooFX Oscillator” displays BUY/SELL signals right on the indicator chart.

Access to the indicator

Please address all questions about this indicator (including access to it) in private messages.