Ergodic Oscillator

Ergodic Oscillator is a powerful VertexFX Client Side VTL Oscillator based on moving averages and market cycle reversals. It comprises of two components, the main indicator (YELLOW) and the signal indicator (RED). The crossover of these two indicator components provides us with precise trading signals.

At first step, we calculate the change in the current close price from the previous close price. In  second step, we calculate the absolute change in the current close price from the previous close price. In third step, we calculate the moving average of the change in closing prices, and the absolute change in closing prices over R_FIRST period. If the SMOOTHING_MODE is 0, we calculate the Simple Moving Averages, otherwise we calculate the Exponential Moving Averages. In the fourth step, we again calculate the moving averages of the moving averages calculated in the previous step using the S_SECOND period.

The main component (YELLOW) is calculated as the ratio between the 2nd order moving average of the change in candle closes, against the 2nd order moving average of the absolute change in candle closes (both calculated in step four). This ratio is expressed as percentage. The signal component (RED) is calculated as the moving average over the SIGNAL_PERIOD of the main (YELLOW) component.

The idea behind this indicator is that in trending markets, the change of candle closes is in the same direction, and remains steady or increases. As the market stalls and starts moving sideways, this change decreases or moves in opposite direction. As a result, the moving averages too change direction. Here we are using shorter values for R_FIRST and S_SECOND to eliminate as much of lag as possible.

Buy: Place Buyposition when the main (Yellow) line closes above the signal (Red) line below the zero level. Do not open the trade if candle has exhibited a gap-up opening.

Sell: Place Sell postion when the main (Yellow) line closes below the signal (Red) line above the zero-level. Do not open the trade if the candle has exhibited a gap-down opening.

Usage

• Download the attachment from vStore or directly from the vStore tab in your terminal by performing a right click on it and selecting Download & Install
• Copy it to your company VertexFX Local VTL Files folder i.e. C:ProgramDataVertexFX Client Terminals”Company name”VTL10Local VTL Scripts
• Restart your Client Terminal or Right Click on “Local VTL Scripts” Tree Node to find the script.