Published on: October 1, 2024
In technical analysis, oscillators are pivotal in helping traders identify momentum, overbought and oversold conditions, and potential reversals. With a plethora of oscillators available, traders often find themselves overwhelmed by multiple indicators providing conflicting signals. This can lead to confusion, hesitation, or even poor trading decisions.
But what if you could combine the strengths of all major oscillators into one study, making trading decisions clearer and more confident?
Enter the King Oscillator, a proprietary tool developed by Definedge Securities.
What is the King Oscillator?
As the name suggests, the King Oscillator (KO) reigns supreme among oscillators. It is designed to merge the functionality of the most popular oscillators, allowing traders to analyse momentum and market conditions holistically. This revolutionary oscillator is available on Tradepoint and Zone Web platforms for all Definedge Securities users.
The King Oscillator simplifies the analysis by combining oscillators such as:
– Relative Strength Index (RSI)
– Chande Momentum Oscillator (CMO)
– Commodity Channel Index(CMI)
Each oscillator has its own methodology for measuring momentum, and by uniting them, the King Oscillator becomes a comprehensive study for traders who want the best of both worlds.
Why Was the King Oscillator Developed?
Many traders tend to clutter their charts with multiple oscillators, often using 3-5 indicators simultaneously to get a clearer picture. Unfortunately, this approach can create more confusion than clarity. One oscillator might signal bullish momentum, while another signals an overbought condition, leaving the trader in a dilemma.
Recognising this common pitfall, Definedge took on the challenge of combining these oscillators into a single tool that maintains their strengths but eliminates the noise. The King Oscillator was designed not only to merge these indicators but to make them complement each other effectively. This way, traders can focus on a singular, cohesive signal rather than trying to reconcile multiple conflicting ones.
How Does the King Oscillator Work?
The King Oscillator’s readings are straightforward and easy to interpret, making it a powerful tool for traders of all skill levels. Here’s a breakdown of how it operates:

Bullish and Bearish Crossovers: When the King Oscillator line crosses above its average line, it signals a bullish crossover, indicating upward momentum. Conversely, it signals a bearish crossover when it crosses below its average line.
Momentum Zones: The King Oscillator can be used to gauge momentum. A rising King Oscillator above its moving average line is bullish, while a falling King Oscillator below its moving average is bearish. When the King Oscillator is above 50, it signals strong bullish momentum, and below 50 indicates bearish momentum.
Overbought and Oversold Conditions: Like traditional oscillators, the King Oscillator helps identify overbought and oversold conditions. The market is considered overbought when the KO exceeds 75, suggesting a possible reversal or slowdown in bullish momentum. Conversely, the market is oversold when the KO is below 25, indicating a potential bounce or reversal in a downtrend.
Divergence: Traders can identify positive and negative divergences using the King Oscillator. Positive divergence occurs when the price makes a lower low while the oscillator makes a higher low, suggesting that bearish momentum is weakening. A negative divergence occurs when the price increases while the oscillator makes a lower high, signalling a weak bullish momentum.
Universal Applicability Across Chart Types
One of the most remarkable features of the King Oscillator is its versatility across different chart types. Whether you prefer:
– Point & Figure (P&F) Charts: The oscillator is calculated based on the number of columns.
– Renko Charts: The oscillator adapts to the bricks.
– Line Break Charts: The KO responds to the number of lines.
– Heikin Ashi Charts: The oscillator works with the candles.
– Kagi Charts: The KO functions with the lines.
While the formula behind the oscillator remains the same across these chart types, its dynamic adaptability allows traders to benefit from its insights, no matter their preferred charting style.
King Oscillator with the Backtest
The King Oscillator has been added to the System Builder for traders looking to automate their strategies. This means traders can create custom systems and backtest them based on the signals generated by the King Oscillator.
Defined Decision-Making with the King Oscillator
The beauty of the King Oscillator lies in its ability to enhance decision-making by offering a unified view of multiple momentum indicators. The KO provides a consolidated, clear picture of whether you’re looking for bullish or bearish crossovers, monitoring momentum, or identifying overbought and oversold zones.
By eliminating the need to manage several oscillators, the King Oscillator reduces trader’s mental load, allowing them to focus on the most important signals.