Automated Trading and Strategy Testing Forum

The Ultimate Oscillator by Larry Williams is calculated as weighted value of three Stochastic, indicators, calculated for fast, middle and short periods.

Larry Williams recommend to open position after formation of divergence.

Buy signals:

• The bullish divergence has appeared: the price at new minimum, the indicator is not at new minimum;
• During the bullish divergence formation the oscillator < 30;
• The oscillator grow higher than maximum level, achieved during formation of bullish divergence. It's the best time to buy.
  

Close long positions:

• The Oscillator value achieved 50 and fall lower than 45;
• The oscillator value > 70 (in some cases it's recommened to wait the fall to 70;
• Sell signal has appeared.
  

Sell signals:

• The bearish divergence has appeared: the price at new maximum, the indicator is not at new maximum;
• During the bearish divergence formation the oscillator > 50;
• The oscillator fall lower the minimum level, achieved during formation of the bearish divergence.
  

Close long positions:

• Oscillator > 65;
• Oscillator < 30;
• Buy signal has appeared.