The Oscillator determines the direction (or trend) of based on the high, low, and closing price of the security. It then compares all three values ( HLC /3) to the previous period’s values to determine how should be factored into the KVO. If the current period’s price is greater than that of the previous period, then is added. It is subtracted, however, if the price is less than the previous period. This utilization of is what makes it an accurate tracker of and a valuable confirmation indicator. This value is often called force or the “trend” line.
A fast and slow of the force are then calculated. The fast has a smaller window length, while the slow has a larger window. Traders can adjust the lengths of each in the input option menu, but we chose the standard 55 and 34 period lengths as the default settings. We are finally left with the actual KVO value after subtracting the slow from the fast .
The Oscillator uses a signal line similar to the and many other indicators. The default length for it is 13, but that length can also be adjusted in the input menu. A shorter length will result in more responsiveness but possibly more false signals and whipsaws.
The Chart and Interpretation:
The histogram shows the KVO series. Remember, since the Oscillator represents the difference between the fast and slow , the KVO is when it is greater than zero and when it is less than zero.
When the KVO is greater than zero, the background on the chart is green, meaning that the trend is and traders should look to go long. On the flip side, the background is red when the KVO is less than zero meaning traders should look to go short.
The aqua line plotted on top of the histogram is the signal line.
Here is a quick summary of the histogram colors:
(if KVO > 0 and KVO > signal)
then (color = teal)
if (KVO > 0 and KVO < signal)
then (color = lime)
if (KVO < 0 and KVO < signal)
then (color = red)
if (KVO < 0 and KVO > signal)
then (color = pink)
Users can choose to have the candles change color to match the KVO histogram color by adjusting the setting in the input menu.
~Happy (and safe) trading~
In true TradingView spirit, the author of this script has published it open-source, so traders can understand and verify it. Cheers to the author! You may use it for free, but reuse of this code in a publication is governed by House Rules. You can favorite it to use it on a chart.
Obviously, this shouldn't be used in isolation but combined with other markers, the KO seems to be king of the Oscillators. I'm probably dead wrong on that but it matches up with the way I use volume as an indicator for price movements. Bravo sir. I'll have to play around with this to see if this makes it easier to just see the KO without having to look down at the KO. Especially when I'm looking for the initial indication.
The Klinger Safety Zone, is causing a "confirmed," for lack of a better word, bull or bear trend if the if the spread is bull or bear AND the fast line is below the 0. However, from my undertanding of the KO, we do not consider it a confirmed bear or bull signal unless the break OCCURS under 0. So the initial Bull or Bear trend cannot be confirmed us true unless not only are the Fast and Slow in the right direction AND both under 0, but, the INITIAL switch from Fast over or under slow must occur on the correct side.
So when they both go under initially, this is NOT a signal that we are to be short or when they both go above initially this is NOT a reason to be long.
This signal definitely has it's usecase, however, if I'm not completely off my fucking rocker and spewing out shit that all made us just a little bit dumber and more likely to lose money, then this signal may be unintentionally hindering the process of making the right decision. However, if someone goes into it understanding it's flaws and (insert word for opposite of flaw that I can't think of), then this tool is likely quite useful.
I'm most likely just a moron though. Have a nice day. :)
It may be more useful to not get caught up in the initial clutter of figuring out when the KO is to be used anyway. Unless we are glued to our screens, have alerts, or are using bots, the "perfect" moment is likely going to be hard to take advantage of if that's what someone is using it for.
Anyway, this is just one tool in the bag for confirmation the "perfect" confirmation may be overlooking all the other use cases of the Klinger Oscillator that this KSZ indicator you've drawn up is capable of. Again, I love the spin, the histogram, and everything.