Find in Indicator Search (type VZO) - Public Library - GMAN indicator
Change levels from 30 to 40
Change 0 level & VZO line to blue colored line
If price is above 50sma bias for long trades, below then short trades.
How to Use Zone Oscillator?
We’re going to reveal how to interpret the zone readings.
A move above the centerline will give us a reading. And, a move below the centerline will give us a reading.
The most important zones are "+60", "+40", “0", “-40", and "-60".
Additionally, traders also use the “+5”, and “-5” zone readings.
Here is how to use VZO in your trading decisions.
Here are the four main zones to keep an eye on:
When VZO rises above and maintains the 5% level, it marks the early phase of an uptrend. Conversely, when VZO falls below the -5% level, it marks the early phase of a downtrend.
Oscillations between 5% and 40% zones mark a zone. Conversely, a reading between -5% and -40% zones mark a zone.
An overbought signal is generated when we have a reading above the 40% zone. Conversely, an oversold signal is generated when we have a reading below the -40% zone.
Reading above the 60% zone is an extremely overbought reading that can signal a reversal. While a reading below the -60% zone is an extremely oversold reading that can signal a reversal.
Let’s see what trading tactics we can use with the volume-based indicators.
During trends, rises with rising prices. The same is true in reverse for trends.
This is basic 101 uptrend psychology.
For this purpose, let’s examine again the EUR/USD chart.
We’re in a clear, strong . The VZO is above the centerline signaling buying pressure. The zone reading between 5% and 40% also indicate a sustained uptrend zone. A buy signal is generated when we cross above the centerline.
The EUR/USD chart above demonstrates how during trends, the VZO has the tendency to stay in the higher zone fluctuating between 0 and 40.
This is a good method to identify the direction of the trend and trade with the trend.
Go to our TSG website - then blog - find oscillator article for complete strategy instructions.