McClellan Oscillator Energies Technical Analysis & 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 candlesticks and bearish candlesticks. This energies technical indicator looks similar to the traditional MACD.

McClellan Oscillator

Energies Technical Analysis and Generating 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 trade signals.

Zero Center Line Crossover Signals:

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

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

Technical Analysis in Energies Trading

Divergence Energies Trading Signals:

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

There are several types of divergences:

Classic Energy Trading Divergence (Regular Energy Trading Divergence)

• Bullish Divergence: Lower lows in energies price action and higher lows in the McClellan Oscillator.

• Bearish Divergence: Higher highs in energies price and lower highs in the McClellan Oscillator.

Hidden Energy Trading Divergence Setup

• Bullish Divergence: Higher lows in energies price action and lower lows in McClellan Oscillator.

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

Oversold/Overbought Levels on Technical Indicator

The McClellan Oscillator is also used to identify potential overbought and oversold levels in energies 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. The best signal to use is the Center-line crossover signals to generate trade signals.