Trends/Momentum oscillators

Ultimate oscillator

Combines buying pressure over 7, 14 and 28 bars into one 0 to 100 number.

Momentum oscillatorsBest on 6M, 1YAlso called UO

Illustration of the ultimate oscillator shape. It is a sketch, not real price data.

What it shows

Larry Williams' ultimate oscillator measures buying pressure (the close minus the lower of the low or previous close) compared with the true range. It does this over three windows, 7, 14 and 28 bars, and mixes them with weights 4, 2 and 1.

Using three windows is meant to reduce the false swings of single-window indicators.

How we find it

The same code that draws it on your chart follows these steps, with the same result every time.

Buying pressure = close − min(low, previous close).
True range as in ATR.
Average buying pressure ÷ average true range for 7, 14 and 28 bars.
UO = 100 × (4×A7 + 2×A14 + A28) ÷ 7.

Starting values: Windows 7, 14, 28; Weights 4, 2, 1; Lines 70 / 30. These are proposed and will be tuned on real price data before launch.

How to read it

The panel shows UO from 0 to 100.
Dashed lines mark 70 and 30.
It moves more slowly than a single-window oscillator.

Status labels you may see

Label	What it means
Above 70	UO is above 70.
Between	UO between 30 and 70.
Below 30	UO is below 30.

What cancels it

Nothing cancels it.

What traders check next

Compared with price highs and lows.
How long above 70 or below 30.
Price trend.

Limits

More complex with more settings.
Rarely at extremes.
Lag.

Try it in forecastviz

Open any ticker and choose Momentum oscillators → Ultimate oscillator in the left menu.
Switch between 6M, 1Y to see how the picture changes.
Compare with Relative strength index and Stochastic oscillator on the same chart.

Open on a ticker

Questions

Why three windows?

To blend short, medium and long buying pressure.

Is it popular?

Less than RSI or MACD.