The Projection Oscillator (PO) was authored by Mel Widner, Stocks and Commodities Mag. 07/1995. The PO uses the Linear Regression slope, along with highs and lows in its calculation. The user may change the method (EMA) and period lengths. This indicator’s definition is further expressed in the condensed code given in the calculation below.
How To Trade Using Projection Oscillator
Trading signals are given when thr pbo crosses the signal line. If the pbo crosses above (upward movement) a buy signal will be generated. Conversely, if the pbo crosses below (downward movement) a sell signal will be given.
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Go to the top menu, choose Study>Mel Widner>Projection Oscillator
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//method = user defined, default is EMA
//pboPeriod = user defined, default is 14
//sigPeriod = user defined, default is 3
//index = current bar number, LOE = less or equal
mHigh = linRegLine(period, high); //returns the slope (m) of Linear Regresion line mLow = linRegLine( period, low); count = 0; pbw = 0, pu = 0, pl = Double.MAX_VALUE; for (i = (index-pboPeriod + 1); i LOE index; i++) //move back 1 period high = high[i]; low = low[i]; vHigh = high + (mHigh * (count)); vLow = low + (mLow * (count)); if (vHigh moreThan pu) pu = vHigh; if (vLow lessThan pl) pl = vLow; count++; endFor Plot1: PBO = 100 * (price - pl) / (pu - pl); Plot2: SIG = ma(method, sigPeriod, pbo); buy = crossedAbove(PBO, SIG); sell = crossedBelow(PBO, SIG);