Klinger Oscillator: Unveiling Market Pulsations

type

status

date

slug

summary

AI summary

AI translation

Indicator Decoding: Formulas and Definitions

Does the calculation of the Klinger Oscillator sound a bit overwhelming? Don't worry, let me explain it to you in detail. The formula of this indicator may look like a math problem, but the logic behind it is actually very intuitive.

Calculation of KO: It is the difference between the exponential moving average (EMA) of the volume force of the 34-period and 55-period. Well, the volume force here is like the pulse of the market, through which we can perceive the market's vitality.

Volume Force (VF): This is the highlight of the formula, as it considers the combination of volume and price fluctuations. The V in the formula represents volume, while T represents trend. The calculation of the trend may seem complex, but it's actually just determining whether the price is rising or falling.

Here are the formulas for calculating the Klinger Oscillator and its steps:

KO = 34-period EMA of Volume Force - 55-period EMA of Volume Force

Definition: KO = Klinger Oscillator VF = Volume Force Volume Force = V x [2 x ((dm/cm) - 1)] x T x 100

Definition: V = Volume T = Trend Trend = +1 if (H + L + C) > (H-1 + L-1 + Cv-1) Trend = -1 if the above condition is < or =

Definition: H = High price L = Low price C = Closing price dm = H - L cm = cm-1+dm if Trend=Trend-1 cm = dm-1 + dm if Trend≠Trend-1

First, record the volume, high, low, and closing prices of this period. Then compare these values with the previous period to determine if the trend is positive or negative. Next, calculate dm using the highest and lowest values of the current period. Then calculate cm using dm and the previous cm value. If necessary, use the dm value instead of the previous cm value in the first calculation.

Next, calculate the Volume Force (VF). Then continue by calculating the 34-period and 55-period Volume Force (VF) Exponential Moving Averages (EMA). Finally, refer to the formula used by Stephen Klinger to calculate the Exponential Moving Average (EMA): EMA = (C x A) + (E x B)

Definitions: C = VF of the current period A = 2 / (X + 1), where X is the moving average period (typically 34 or 55) E = EMA of the previous period B = 1-A

By analyzing the differences between moving averages set at different time frames (typically 34 and 55), this oscillation indicator attempts to showcase the data and demonstrate how the volume of secure trades affects short-term and long-term price trends to traders. In general, a 13-period moving average is used as a signal line to trigger buy or sell signals in the market.

How to interpret this indicator?

As a savvy trader, you need to know how to use this tool. The KO value can help you determine the strength of market trends, and of course, it has some little secrets:

Buy and Sell Signals: When the KO line crosses the zero line from below, it may be a good opportunity to buy; conversely, when it crosses the zero line from above, it may be a sell signal.

Divergence: If the price and KO value do not follow the same trend, it may indicate an upcoming market reversal. It's like the market quietly telling you its intentions.

Notes

When using the Klinger Oscillator, there are also some pitfalls to be aware of:

Validity of signals: The KO indicator generates many signals, but not all signals are accurate. To be a savvy trader, it is crucial to discern the validity of these signals.

Zero line crossovers: Crossovers at the zero line can lead to confusion in analysis. In some cases, even if the indicator crosses the zero line, it may not maintain its directionality, so careful analysis is necessary.

Combining with other indicators: The Klinger Oscillator is best used in conjunction with other technical indicators. Using it alone may not provide enough information to make accurate trading decisions.

In general, the Klinger Oscillator is a very powerful tool that can help you grasp the pulse of the market. However, remember that no indicator is foolproof, and the key to success lies in using it correctly and having a deep understanding of the market. Below, I will show you the TradingView code for this indicator.

This code is a script for calculating the Klinger Oscillator indicator. It is written in Pine Script language, which is used on the TradingView platform.

Here is an explanation of the code:

This line sets the script version and indicator title. The title parameter is set to "Klinger Oscillator", indicating that the indicator calculates the Klinger Oscillator.

These two lines define a variable cumVol and initialize it to 0. Then, it updates the cumVol value by accumulating the current candle's volume.

This conditional statement checks if it has reached the last candlestick and throws a runtime error with a message stating that the data provider has not provided volume data if the cumulative trading volume equals 0.

These three lines calculate the values of the signal (sv), Klinger oscillator (kvo), and signal line (sig).

The calculation of sv is based on the changes in hlc3: if the change in hlc3 is greater than or equal to 0, then sv is equal to the current volume; otherwise, it is equal to the negative of the current volume.

kvo is obtained by subtracting the 55-period exponential moving average of sv from the 34-period exponential moving average of sv.

sig is obtained by calculating the 13-period exponential moving average of kvo.

These two lines are used to draw the Klinger oscillator and signal line. They are drawn using different colors and have corresponding titles.