The Classic oscillator type is a simple oscillator designed to return divergences as well as determine points of potential trend reversals determined from crosses between the oscillator and overbought/oversold zones.
An oscillator value being over 50 is indicative of an uptrend, while a value under 50 is indicative of a downtrend, using a higher Length value allows detecting the direction of longer-term trends. A lighter column color (that is an oscillator direction going against the trend detected by the oscillator) is indicative of a decelerating trend, highlighting a potential reversal.
The oscillator is particularly designed to spot divergences
Reversal dots are indicative of a potential reversal. A bullish (green) dot occurs when the oscillator crossover the higher oversold zone, while a bearish dot (red) occurs when the oscillator crossunder the lower overbought zone.
Using a higher Length or Smoothing value or a smoother smoothing method will return less frequent dots.
The Classic oscillator includes 2 alerts based on the displayed bull and bear dots displayed on the oscillator.
This alerts triggers when the Classic oscillator cross over the upper oversold zone.
This alerts triggers when the Classic oscillator cross under the lower overbought zone.