The OsMA is a technical indicator that shows the difference between an oscillator and its moving average over a given period of time. … The MACD has a built-in moving average, which is the signal line. The signal line is an average of the MACDline.
The OsMA Indicator is a part of many popular trading platforms including the MT4 platform. You must set four key parameters while adjusting the Moving Average of Oscillator.
- The slow EMA is the exponential moving average of the price with a relatively long period. By default, its value is set to 26.
- The fast EMA is another moving average with the short period (12). The MACD value is calculated as the slow EMA minus the fast EMA.
- The MACD SMA is a simple moving average of the MACD values (the signal line), which is designed to smooth a histogram. It usually has a very short period and in our case it is set to 9.
- You can use any source data for the price type parameter. It is usually the price of closing the bars but it can be various average prices and the price minimum/maximum or the opening price.
The OsMA Indicator and the Divergence
Practically all the modern oscillators can determine the divergence, which has always been considered a strong trading signal. The Moving Average of Oscillator is definitely a leader of its kind.