DT Oscillator

The DT Oscillator Indicator is a momentum indicator that acts as a two-lined oscillator to identify and display momentum direction. It is an oscillator that was created by combining two prominent oscillators: the Relative Strength Index (RSI) and the Stochastic Oscillator (SO).

What is the DT Oscillator?

The DT Oscillator Indicator is a trend-following forex scalping oscillator based on crossovers. This indicator combines the SK RSI and the SD Stoch to plot crossover signals across market trends. It helps the trader through trend-based entrances and exits. As a result, if you want to improve the amount of confluence in your trades, you may combine it with other trend-oriented indicators.

The DT Oscillator may be used to trade any forex currency pair published on the financial markets. However, as a scalping indicator, the DT Oscillator can be used on shorter timeframe charts such as M1, M5, and M15 on your forex trading platform.

Setting up the DT Oscillator
Setting up the DT Oscillator

DT Oscillator Strategy

The DT Oscillator plots crossover signs of market trends using an 8-day SD Stoch (red) and a 13-day SK RSI (blue). When the Stoch level climbs above the RSI value, it is considered a bullish crossing, signaling that the market is in a positive trend.

When the Stoch value falls below the current RSI level, it signifies a bearish crossing, signifying a negative market trend. These crossover indications can be utilized to enter and exit markets. For example, if you see an opposing crossover signal to your active market entrance at any moment, you may elect to leave.

Buy Signal

The following could be your checklist for a buy trade:

  • When the SD Stoch value rises above the current SK RSI level.
  • When a bullish candle is plotted.

Once these two events occur:

  • You could open a buy position after the bullish crossover and candles happen respectively and you get your signal confirmation.
  • You could set your stop loss just below the nearest swing low.
  • You could set your take profit at the nearest resistance zone, or you could exit trade when the indicator plots a bearish crossover.
  • For good risk management, I would only consider trades with a risk to reward ratio of at least 1:2.
DT Oscillator Buy Setup
DT Oscillator Buy Setup

Sell Signal

The following could be your checklist for a sell trade:

  • When the SD Stoch value falls below the current SK RSI level.
  • When a bearish candle is plotted.

Once these two events occur:

  • You could open a sell position after the bearish crossover and candles happen respectively and you get your signal confirmation.
  • You could set your stop loss just above the nearest swing high.
  • You could set your take profit at the nearest support zone, or you could exit trade when the indicator plots a bullish crossover.
  • For good risk management, I would only consider trades with a risk to reward ratio of at least 1:2.
DT Oscillator Sell Setup
DT Oscillator Sell Setup

DT Oscillator Pros & Cons

Pros

  • The DT Oscillator may be used to trade any currency pair.
  • This Indicator can be used in conjunction with other technical indicators to aid confluence.
  • This indicator helps show the market momentum and trend direction of the asset being traded.
  • It is quite simple to use and will fit traders of any degree of expertise.

Cons

  • The DT Oscillator may not be very suitable for timeframes above M15.
  • The DT Oscillator may give false signals in some cases.
  • The trader would need to time entry and confirm signals with additional analysis.

Conclusion

The DT Oscillator is a technical indicator that is based on the operation of multiple indicators. It shows the current trend and trading momentum of the market in which it is being used. It is user-friendly and provides trading indications by displaying market direction, however it is susceptible to false momentum. Therefore, this indicator should not be used as a stand-alone trade signal, but rather in conjunction with price action and other technical indicators.