The R Squared Indicator, a simple oscillator, tells you the overbought or oversold levels. R Squared is part of a group that includes oscillators. It functions in the same way as the RSI and Stochastics. The indicator oscillates between 101 and 0 with two trend direction signals lines. Both the Smooth and length lines have a similar period.
The indicator can be used by traders at any time. The Indicator is most effective when applied over a longer timeframe.
R Squared Indicator BUY/SELL signals
To determine the BUY or SELL signals, traders need to identify oversold or overbought areas. The R Squared indicator oscillates from 0 to 101, as mentioned previously. If the signal line is close to 101, it means that the level is overbought. This is where traders can either enter or exit short positions.
In contrast, traders can take long or short positions if the signal line is near 0. Although the Indicator is the best indicator, it’s still better to use it in conjunction with other indicators such as the MA and the RSI. This is because false signals are possible with the indicator.
Conclusion
The R Squared Indicator, a momentum oscillator, tells you about overbought or oversold levels. These levels can be used to help traders determine their position. The indicator can be downloaded free of charge from our website.
