McClellan Oscillator Commodities Technical Analysis and McClellan Oscillator Trading Signals

Developed by McClellan.

The McClellan Oscillator is an indicator that is based on smoothing the difference between the number of bullish candles & bearish candlesticks. This commodity technical indicator looks similar to the traditional MACD.

McClellan Oscillator

Commodity Technical Analysis & How to Generate Trading Signals

This Oscillator is a momentum indicator that can be traded in the same way as the MACD indicator. There are 3 techniques that McClellan Oscillator can be used to generate trading signals.

Zero Center Line Crossover Signals:

Bullish Signals- When the oscillator crosses above zero center-line a buy commodity signal is given.

Bearish Signals- When the oscillator crosses below zero center-line a sell commodity signal is given.

Technical Analysis in Commodity Trading

Divergence Commodity Trading Signals:

Looking for divergences between the McClellan Oscillator and commodities price can prove to be very effective in spotting potential reversal and/or commodity trend continuation points in commodities price movement.

There are several types of divergences:

Classic Commodities Trading Divergence ( Regular Commodities Trading Divergence )

• Bullish Divergence: Lower lows in commodities price action & higher lows in the McClellan Oscillator.

• Bearish Divergence: Higher highs in commodities price & lower highs in the McClellan Oscillator.

Hidden Commodities Trading Divergence Setup

• Bullish Divergence: Higher lows in commodities price action & lower lows in McClellan Oscillator.

• Bearish Divergence: Lower highs in commodities price action and higher highs in McClellan Oscillator.

Oversold/Overbought Levels on Indicator

The McClellan Oscillator is also used to identify potential overbought and oversold levels in commodities price action movements. The overbought and oversold conditions are generated when the oscillator moves to extreme levels on one side and starts to turn, however, in a strong trending market the oscillator will stay in the overbought and oversold levels for a long time. It is not recommended to trade overbought and oversold levels to generate trading signals. Best signal to use is the Center-line cross over signals to generate trading signals.