How to use the Os MA indicator?

<p id="isPasted">The OSMA indicator is continuation of classical MACD (here more Using Indicators) and is constructed on the basis of a ratio of two moving averages. As the oscillator in calculation the base line of MACD is used, for smoothing its signal line is used.</p><p>The less difference in indications of OSMA and MACD – the weaker the current short-term trend is and even if this is a temporary phenomenon (the general trend remains), the trader receives an additional occasion to pay to the market special attention.</p><p class="forexqa-img-container"><img src="https://prod-forexqna.s3.amazonaws.com/uploads/froala_editor/images/1745469538068.png" style="width: 730px;" class="fr-fic fr-draggable fr-dib forexqa-img"></p><p>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; General view of the indicator Moving Average of Oscillator</p><p>Scheme of mutual signals OSMA+MACD</p><p>Calculation of the additional difference in the MACD readings allows you to evaluate its internal dynamics and signal quality, find problem points, in particular − for a turn or timely increase/closing position.</p><p>It is OSMA that is considered the best tool for finding internal divergences.</p><p>If to consider that the stability of MACD signals is very dependent on the period of application, then signals of Moving Average of Oscillator give additional opportunities for profit, while its more popular «relative» is working out on a long-term trend (see OsMA).</p><p><br></p><p>Calculation procedure</p><p>The value of the indicator is the difference between the values of the MACD histogram and its signal line (this is the middle one mentioned in the name Moving Average of Oscillator).</p><p>The difference between the fast and slow EMA values is considered the value of the MACD indicator and the signal line is applied to this value.</p><p>If the difference is positive (MACD &gt; Signal), the OSMA histogram is located above the centre line; tendency to increase in priority;</p><p>If the difference is negative (MACD &lt; Signal), the OSMA histogram is located below the zero line; the price of the asset is reduced;</p><p>If MACD = Signal is the value of OSMA = 0, there is no strong trend in the market.</p><p>Parameters and control</p><p>Configuration of the indicator is identical to classical MACD, only the graphical representation of the result changes − that is why both indicators are often used in the bundle.</p><p><br></p><p>Parameters and the General View Moving Average of Oscillator</p><p><img data-fr-image-pasted="true" src="https://forextester.com/blog/app/uploads/moving-average-of-oscillator_2.jpg" style="width: 300px;" class="fr-fic fr-dib fr-draggable"></p><p>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;Standard version of the OSMA indicator</p><p>There are four options for OSMA settings:</p><p>Fast EMA (the default period is 12);</p><p>Slow EMA (default is 26);</p><p>Signal line MACD SMA (default is 9);</p><p>The price type for the calculation of the moving averages, traditionally − the price Close, other options − Open, Low, High and various options for average prices are considered exotic and rarely used.</p><p>The indicator is a traditional histogram with a center line, located in an additional window below the price chart. Height of the histogram is equal to a difference (MACD – Signal). The central line is dynamically shifted, depending on the amplitude of the oscillations. Each point on the histogram has special trade value.</p>