A typical oscillator is a technical analysis tool or indicator that oscillates between two extreme values for signaling overbought or oversold conditions.  For example, as the value of the oscillator approaches the upper extreme value the security (for example futures) is deemed to be overbought and as the oscillator approaches the lower extreme the security is deemed to be oversold.  Traditional oscillator indicators are most advantageous when no clear trend can be readily discernible in a security trading horizontally or sideways.  The most common trading oscillators are the stochastic, RSI, MACD and CCI.  New Era Trader literature refers to the Oscillator with a capital “O” while a little “o” (or oscillator) refers to all other oscillators.

The unique NET Oscillator, sometimes called the “Ed Cross...”, is one of the four NET base indicators.  The Oscillator is a product of hundreds of hours of research, programming, testing and, internally, uses 12 different analysis techniques followed by perhaps thousands of hours of detailed usage analysis.  This proprietary indicator runs on TradeStation and NinjaTrader, identifies highs and lows and yet keeps the trader in trends for days, weeks and even months.  The Oscillator is used in nearly all NET trades and has become the most valuable technical indicator available to NET traders.  While MACD, RSI, CCI and many other other oscillators are valuable, the Oscillator has be proven to be superior in all market conditions.  We know of now better technical trading tool.

The Oscillator has two oscillating or primary lines.  The red line is the Oscillator (line) and the green line, Oscillator Average.  In this course, Oscillator Average is simply referred as Average and is a moving average (MA) of price.  The two fixed but changeable horizontal green (default color) lines, called the oversold (OS) and overbought (OB) reference lines at 10 and 90, have traditional oscillator settings.  However, the OS and OB settings could also be set to 17 and 89 as these are the better levels confirming trading ranges.  These horizontal lines visually show when the Oscillator crosses at or near the OB or OS line and vice versa.

The unique characteristic of the Oscillator, unlike traditional oscillators, is defining when potential (price) trending power moves are about to occur.  The New Era Trader courses explain how the Oscillator has four different divergence types (Turbo Divergence, Trend Divergence, Leading Indicator Divergence and Trading Range Divergence), which should be traded, traded under what conditions and which should be avoided (i.e. Turbo Divergence).  The New Era Trader's book The Definitive Trading Bible has a 46-page chapter just on the nuances of the Oscillator.

Oscillator Uniqueness Illustrated

The Oscillator can only truly be appreciated when compared to other oscillators especially in, for example, trending markets.

This chart 11/14/2007 5-minute plots the Oscillator, stochastic and MACD indicators in a down trending market.  The New Era Trader Oscillator generates a better shorting signal and generates a 3X or more return as compared to stochastic and MACD indicators.

Each trader may want to make his own comparative analysis based on their use of these common oscillators to prove to themselves the value of the Oscillator. See the small table in the upper right for estimated trade returns. In the chart below, the Oscillator in a down trend (with the Oscillator reaching 62 at the mid-Uni) is very discernible while the other oscillator setup signals vary widely.

Click here to see three basic Oscillator training videos.

Click here [This a LARGE video file so please wait for the download] to view a video comparing the NET Oscillator to the traditional MACD and Stochastic oscillators.

Click here to view the NET Indicator Charting Tool page - a link to all of the NET software technical trading tools.

Webinar Oscillator Videos

This December 2008 video, broken in three parts, is the first webinar Stan ever did on the Oscillator. Although the recording is not perfect it's still quite informative.

Part 1 - 20 minutes, Part 2 - 24 minutes, Part 3 - 25 minutes

Example Charts

The following charts help to illustrate the unique trading value of the NET Oscillator.

Chart 1 - 5-minute S&P chart shows how the Oscillator signals weakness as the day trends lower.
Chart 2 - Daily S&P chart shows how the Oscillator signals strength in an up trend.

Have a particular symbol chart you would like to see with the Oscillator on?  As an introductory free service, send an email to This e-mail address is being protected from spambots. You need JavaScript enabled to view it with the requested symbol (i.e. IBM), chart timeframe (i.e. 5, 30, daily, etc. time frame) and chart type (bar or candle) and usually within 48 hours New Era Trader will send you this chart with the Oscillator on it for your comparative purposes.  Please limit to fewer than five requests.

There are literally several thousand NET archive charts to further demonstrate the power of the NET Oscillator as a predictive tool.  Of course, each trader always needs do their own due dillgence to independently confirmation this is true from an historical point-of-view.  In real-time each trader needs to confirm that the trend will continue or if price is merely at the end of a trading range.  To confirm the trade, NET traders use a handful of other independent indicators to determine (with probability) future market direction.

Leasing Information
The NET TradeStation Oscillator is part of the NET Oscillator/Indicators Tool Package as a monthly or longer lease. 
NinjaTraders should use this link -> NT Oscillator.

Oscillator Training - The Oscillator Chapter

To make Oscillator training more effective especially for those needing a written operating manual, the Oscillator chapter has been extracted from the New Era Trader book The Definitive Trading Bible. For more information about this extraction click here.