Ultimate Oscillator — Indicator dictionary

An indicator that blends buying pressure over a short, a medium and a long period into a number from 0 to 100.

Weapon tier: Standard
Slots used: Sub-charts 1/2
Created by: Larry Williams · 1976

Concept

Ultimate Oscillator measures, for each candle, how far above the bottom of that day’s range the close finished, averages this over three periods of 7, 14 and 28 candles, and blends them. The idea is to make it less jumpy than an indicator that uses a single short period.

The panel shows a single line with dotted lines at 30 and 70. Above 70 is often read as “overbought” and below 30 as “oversold”.

Ultimate Oscillator

Charts by TradingView Lightweight Charts™

In this chart the rise after the line came back above 30 was small, and it soon turned into a sideways drift. Not rising much, or falling again, after the signal is common too. Drag the chart sideways with a finger or the mouse to move it, and pinch with two fingers to zoom in. With a keyboard, click the chart, then use ←/→ to move and +/− to zoom.

How it is calculated

For each candle, buying pressure = close − (the lower of that candle’s low and the previous close), and true range = (the higher of that candle’s high and the previous close) − (the lower one).

For each of the three periods (7, 14 and 28 candles), find “sum of buying pressure ÷ sum of true range”.

Ultimate Oscillator = 100 × (4 × short value + 2 × medium value + long value) ÷ 7. The short period gets more weight.

Parameters

What it sets	Name in the game	Default	Range
Short period (candles)	period1	7	2 – 50
Medium period (candles)	period2	14	2 – 100
Long period (candles)	period3	28	2 – 200

Trading ideas

Leaving oversold: when the line has been below 30 and then climbs back above it, it is commonly read as a sign that the selling pressure has eased. The chart on this page shows that scene.

Overbought works the other way: when the line falls from above 70 back below it, the buying pressure is seen as fading.

Common traps

Even blended over three periods, the line stays above 70 or below 30 for a long time in a strong trend.
30 and 70 are only conventions. Some stocks hardly ever fall to 30.
The chart on this page was chosen as a scene where the price rose a little after the signal. Read it together with the trend (lesson 2) and volume.

In the game

“Ultimate Oscillator” is a “Standard” weapon and uses 1 of the “Sub-charts” panels (limit 2). Volume in the starting setup already uses 1, so adding it brings it to 2 (0 left).
The panel shows a single line and dotted lines at 30 and 70.

Related indicators and lessons

RSI — An indicator that compares recent up moves with recent down moves and shows, as a number from 0 to 100, which side has been stronger lately.
Stochastic — An indicator that shows, on a scale of 0 to 100, where today’s close sits between the lowest and the highest price of the last few candles.
SONAR — An indicator that draws how much an exponential moving average has risen (or fallen) compared with a few candles ago, to read the “slope” of the trend.
TRIX — An indicator that shows by what percent, per candle, a very smooth line — an exponential moving average stacked three times — rises or falls.
CCI — An indicator that shows how many times its usual swing the price has moved away from its recent average.
ROC — An indicator that connects into a line how many percent the close has risen or fallen compared with the close a few candles ago.
Disparity Index — An indicator that shows, around a baseline of 100, how many percent the close is away from its moving average.
Psychological Line — An indicator that reads the market mood, upbeat or gloomy, from the percentage of recent candles that closed higher.
Williams %R — An indicator that shows, as a number from −100 to 0, how far today’s close sits below the highest price of recent candles.
AB Ratio — An indicator that compares how far each candle rose above and fell below its open, showing which side was stronger during the session.
2. Trends and sideways moves