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Creator: Definedge
The XO indicator is a point-and-figure chart indicator developed by Prashant Shah.
The indicator is designed using the X, O, and vertical column properties of the Point & Figure chart.
The XO Indicator calculates the strength of bulls and bears. However, no statistical calculations are applied such as summation, average, or multiplication. It calculates it by looking at the bullish and bearish points in the price pattern.
An “X” represents a bullish print on a P&F chart, whereas an “O” represents a bearish print. Thus, this indicator is a price-based indicator plotted on a chart.
Using the indicator, the number of ‘X’s and ‘O’s in the pattern is computed and displayed below the chart. When the XO indicator is plotted, two lines are plotted below the chart. This green line represents the bullish print line that calculates the number of “X”s in the pattern. The red line indicates a bearish print line that calculates the number of ‘O’s in the pattern.
If the bullish line is above the bearish line, then the bulls are dominating and an uptrend is strong. Whenever the bearish line is above the bullish line, it indicates that the bears are dominating and it is a strong downtrend.
The indicator table value in TradePoint & RZone also provides you with a list of all values of this indicator for any group of stocks. This will allow you to compare the readings of this indicator across different stocks.
This indicator is also available in the System Builder of RZone & TradePoint. Using the system builder, you can develop various strategies based on the different conditions already present in this indicator. Additionally, it can be used with other indicators or price patterns to develop effective trading strategies. For any group of stocks and market segments, you can scan and backtest stocks based on those strategies.