True Oversold Overbought[New Upgrade: TOSOB Smoothing X days] – Trading Systems – 4 March 2025
New Upgrade: TOSOB Smoothing X days
Most indicators that scan for Oversold or Overbought levels have a major downfall; they keep touching and re-touching what was previously otherwise marking oversold overbought state. In this new update, we have introduced smoothing without introducing delayed signaling when the market actually reaches a true Oversold Overbought level.
Usage:
1. Overbought/Oversold states: When the Green line is above 50, the asset is overbought while it is oversold if the red line is below -50 [This is based on the default settings and +ve Level value=50 and -ve Level value=-50]. You can buy/sell breakout or snap early change of market structure.
2. Early Range Breakout: To take advantage of this, set the +ve Level value to 5 and -ve Level value to -5 when trading XAUUSD. Open buy if the price breaks above the Green Box and sell when price breaks below the Blue box. Different instruments have different levels, but this is usually below 10 and above -10.
For this to work effectively, follow the trend buy checking the color of the higher smoothing signal. If it is green, only buy and if red, only sell. For example, if you are trading on the 15M chart, confirm with the 1H. If you see an uptrend , buy breakouts on “Asset Up” Zone. If main trend is bears, sell on “Asset Down” Zone.
Another point is that you can adjust the Tosob Period depending on your desired sensitivity.
