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The word OsMA stands for Oscillator of Moving Average. This indicator is one of the hidden Gems that can give you great results and a high-Profit ratio if used properly and with a combination of other trend indicators. In this article, I am going to use the combination of the OsMA indicator plus the Super Trend Indicator. I have already covered about the Super trend indicator in my last article. In case you haven’t read it yet. I will highly suggest you go through it once here.
What is OsMA Indicator?
OsMA Indicator is a technical analysis tool that helps traders to analyse the security possible movements and trends. The indicator is the combination of an oscillator and the moving average of that oscillator.
Talking about the components of the indicator, the indicator is a technical analysis tool that combines the Moving Average and MACD (Moving Average Convergence Divergence) indicators that helps traders to find the more accurate trading signals and determine the strength of the trend.
The formula for calculating the OsMA indicator is as follows:
OsMA = MACD – Signal line
MACD = 12-day EMA (Exponential Moving Average) – 26-day EMA
Signal line = 9-day EMA of MACD
Key Points About OsMA Indicator
- The OsMA indicator is a technical analysis tool that combines the Moving Average and MACD indicators to provide traders with a more accurate representation of the market momentum.
- The OsMA indicator is calculated by subtracting a longer-term Moving Average from a shorter-term Moving Average. The result is plotted on a histogram that oscillates above and below a zero line, indicating positive and negative values respectively.
- The OsMA indicator is primarily used to identify the strength and direction of a trend. When the OsMA indicator is positive, it indicates that the shorter-term Moving Average is above the longer-term Moving Average, which indicates a bullish signal. vice versa, when the OsMA is negative, it indicates that the shorter-term Moving Average is below the longer-term Moving Average, which is a bearish signal.
- Traders can also use the OsMA indicator to identify potential buy and sell signals. When the OsMA crosses above the zero line, it’s a buy signal, and when it crosses below the zero line, it’s a sell signal.
- The OsMA indicator can be used to confirm other technical indicators. For example, if a trader identifies a potential trend reversal using a different indicator, they can use the OsMA indicator to confirm the strength of the trend.
- The OsMA indicator can be customized on trading platforms such as Pocket Option. Traders can adjust the settings for the Moving Averages and the appearance of the histogram and MACD line to better visualize the indicator.
- While the OsMA indicator can be a useful tool for traders, it should be used in conjunction with other technical and fundamental analysis methods to make informed trading decisions. Traders should also be cautious when using the OsMA indicator to identify potential buy and sell signals, as there can be false signals during periods of market volatility.
Adding the combination of OsMA and Super Trend on the Pocket Option chart
The first step is to log in to your Pocket Option account. In case, you don’t have one fill out the form below.
Once, you have logged in click on the indicator button and search for OsMA and Super Trend in the list.
Now, configure the indicator as per your needs (colour, period & more). and once you have done it click on the apply button.
How to Trade with the Combination of OsMA and Super Trend on the Pocket Option Chart
Trading with the combination of OsMA and Super Trend using on the Pocket Option chart is very easy. you just need to remember and combine the rules of the two indicators together. once you have found a trend using the OsMA indicator you need to then confirm the strength of the trend using the Super Trend.
In the OsMA indicator, You can consider a Bullish Trend when you start to see histogram spikes above the zero line plus you see the super trend line intersecting the price from the bottom to the top. This confirms a strong bullish trend and here we can place a buy trade.
Similarly, when we see histogram spikes are below the zero line plus the price is below the super trend line it signals a strong bearish trend and here we can place a sell trade.
Try the above strategy on the Pocket Option demo account.