The Overbought Oversold Level Trading Indicator is a non-repainting indicator that identifies overbought and oversold levels using two Donchian channels with different periods. It only repaints on the current, unclosed bar.
On each bar, the indicator calculates the total distance between the highest high of the larger period and the lowest low of the smaller period, then between the highest high of the smaller period and the lowest low of the larger period.
The two values are then compared in a percentage ratio where 10% equals 100% to smooth out the indicator’s noise and minimize false level crossings.
When the Overbought Oversold Level indicator line is above the upper or below the lower level, the line changes color for easier signal visualization.
- Download the Overbought Oversold Level Trading Indicator
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FAQ
What is the Overbought Oversold Level Trading Indicator?
The Overbought Oversold Level Trading Indicator is a non-repainting tool that identifies overbought and oversold levels using two Donchian channels with different periods.
How does the indicator work?
The indicator calculates the distance between the highest high and lowest low of different periods and compares them in a percentage ratio to reduce noise and false signals.
Why is this indicator useful for traders?
This indicator helps traders identify potential market reversals and corrections by highlighting overbought and oversold conditions without repaint, making it a reliable tool for decision-making.
