Forex Technical Analysis - Forex Oscillators

The name of oscillator derives from the Latin word oscillo which means “I swing”. In technical analysis oscillator is the mathematical expression of the speed of price movements over time. By their form oscillators are advanced indicators.

Basic concepts of using oscillators are the overbought and oversold conditions of market. The market is considered overbought when the price is near its upper limit, and its further improvement is unlikely. Oversold zone is characterized by such a low price, that at the given moment its further downturn is unlikely. Although the analysis and use of oscillators best of all are represented at the constant state of market, the time of trend reversal can also be determined by their help.

To identify a trend reversal it’s necessary to understand the concepts of convergence and divergence of the curve oscillator with the direction of price movements.