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Oscillator

An indicator whose values swing within a bounded range and describe where price sits relative to its recent span.

How to read the number

It answers a question about position inside the span of recent intervals, not about the size of the move: the same reading appears on a quiet stretch and on a violent one.

When the metric lies

In a sustained directional move an oscillator pins itself to the edge of its range. An extreme reading there means strength of the move, not its imminent end.

Also known as: momentum oscillator

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