Oscillators pattern and Reversal

oscillators pattern

Oscillators and Reversal:

Oscillators pattern reflect that the momentum of trade is slow.


If the Oscillators pattern is formed during an uptrend, it has different meaning and reflects the number of buyers in the market while if this pattern is formed during the downtrend, it has opposite meaning as it shows the number of sellers who are interested in trade at that time. During an uptrend in forex trading when the price of a certain currency is increasing, the formation of Oscillators Pattern indicates that there are just fewer buyers who are willing to buy right now.

Oscillators and Downtrend:

If the Oscillators pattern is formed when the price of a currency is falling, it means that there are just fewer sellers ready to sell now.


If you observe that the momentum is changing, it indicates that the current trend (whether it is uptrend or downtrend) is not strong now. The trend is about to complete its course. It is weakening now. Therefore you can expect a reversal in trend now. The direction of the price movement of the currency in expected soon. Thus be prepared for a reversal.

Mixed Signals:

If you get mix sings and signals from Stochastic, Parabolic or RSI, then you need to wait. As Stochastic basically values the range of price but it does not bother about the hourly changes in price while the Parabolic uses other calculations which may become the cause of chaos and conflict. Similarly RSI pays much attention to the change in the price of a currency ranging from a closing price till the next closing price. Sometimes you get mixed signals in market; few of these indicators give buying signals while others indicate to sell currency. Thus instead of trusting a single indicator, wait for a good trading opportunity. Do not be hasty. Let the situation settled down. You should trade, when you have clear signals.

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