OSMA Strategy

[contentblock id=1]

OSMA is also known as a moving average of the oscillator.

When opening this indicator for the first time, chances are you will notice is that it looks similar to the MACD indicator, with all the vertical lines going up and down from a horizontal midway origin.

The truth is, OSMA Strategy is not that different from MACD Indicator.

In fact, even uses the same default moving average settings of the MACD.

As an indicator, the OSMA can be used on its own.

However, as most indicators, it is usually advised to pair it with another indicator, use it in conjunction with another filter and/or use a bit of common sense.
The general advice on using OSMA Indicator is to pay attention when the vertical line shifts from positive to negative and negative to positive.

Whenever the first bar appears from positive to negative, you short the pair; and when the first vertical line appears from negative to positive, you buy the pair.

However, this is a crude way of using OSMA and a great deal of caution must be exercised if following such advice.

However, there are a few filters you can use to make with OSMA indicator to make more accurate trades.

You can use this variation to make profitable trades while using the OSMA Indicator.

Instead of using the first bar to take a position, use the second vertical line as a signal for a buy or sell position.

When the second vertical line appears, check the price and locate the first nearest support and resistance.

If the OSMA is shifting from positive to negative, you can be looking for a short trade.

However, don’t short yet, look for the nearest support and assess if the price still has a long way to go before it hits the support.

If so, you can enter the trade and exit it a few pips before it hits the support price.

To make buy position, simply reverse the process – wait for the OSMA to shift from negative to positive and spot if the price has a long way to go before it hits the resistance.