Features of the SMT Oscillator

Accurately identifies chart turning points.   Popular momentum indicators like the Relative Strength Index (RSI), Stochastics, MACD, Commodity Channel Index (CCI) or True Strength Index (TSI) are widely used by market technicians to estimate the direction, velocity and turning points of market movements. However, chart analysis with these conventional indicators often does not produce consistent result due to their tendency to trigger false signals. One of the problems with conventional oscillators and other classic indicators is the unavoidable trade-off between smoothing and lag. Any attempt to smooth the oscillator invariably adds lag, often to the point where the indicator becomes useless. The SMT Oscillator has been designed to rectify these problems, thereby producing accurate, smooth and low-lag signals which tend to eliminate noise-related whipsaws.

Shows reliable price divergence that other indicators miss.   An important characteristic of the SMT Oscillator is it's ability to show price divergences that other popular indicators often miss. Divergences occur when price makes a new high (or low) that is not confirmed by a new SMT Oscillator high (or low). This divergence indicates a potential price reversal. The chart shows important top and bottom divergences that resulted in profitable trades.

A valuable tool to confirm chart patterns.   Chart pattern and trend line analysis is one of the most popular and widely used technique in technical analysis. The most difficult task when using chart pattern analysis is to confirm the direction of breakouts and identify false breakouts. The SMT Oscillator can be used to assist in the confirmation of chart pattern analysis and breakouts.