Ultimate Oscillator

The Ultimate Oscillator blends buying pressure relative to true range across three timeframes into a single weighted momentum reading bounded between 0 and 100. Larry Williams built it to fix single-window oscillators, which throw extremes and divergences at different times depending on length: a fast 7-bar window carries most weight, anchored by 14- and 28-bar sums. This is the standard implementation of Williams' formula — buying pressure (how far the close finishes above the true low) summed against true range over each window, blended with the classic 4/2/1 weighting, and plotted as the UO line against dashed levels at 70 and 30.

How to Trade the Ultimate Oscillator?

• UO below 30: selling pressure dominant across all three windows — the oversold zone where Williams' buy setup begins.
• UO above 70: buying pressure stretched across the blend — the overbought zone for the mirrored sell setup.
• Bullish divergence from the oversold zone: the original signal — price presses to a fresh low the oscillator refuses to match, its first trough under 30; the trigger is the oscillator clearing the high between its troughs.
• Crosses back through the levels: zone exits give a simpler mean-reversion timing read.

Extremes arrive less often than on single-window tools, and a middling reading can hide a hot short window cooled by a soft long one.

Ultimate Oscillator Settings

• Fast Length (default 7): the shortest window, weighted 4, so it dominates the oscillator's movement.
• Middle Length (default 14): the intermediate window, weighted 2.
• Slow Length (default 28): the slowest window, weighted 1; lengthening steadies readings at the cost of response.
• Overbought (default 70) and Oversold (default 30): the reference levels bounding the extreme zones.

The 4/2/1 weights are fixed constants of the published formula; tuning happens through the lengths.

Frequently Asked Questions

How does the Ultimate Oscillator differ from the RSI?

RSI reads momentum through one window; the Ultimate Oscillator averages buying pressure against true range through three, weighted toward the shortest — fewer extreme readings, smoother divergence arcs, each signal drawing on more context.

What alerts does the Ultimate Oscillator build include?

Four alert conditions, all level events: crossing above the overbought level, back below it, below the oversold level, and back above it — zone entries plus the exits often used for timing.

Should the three lengths keep their 1:2:4 spacing?

The 7/14/28 defaults double at each step, with the 4/2/1 weights designed around that spacing. Widen or compress it for slower or faster styles, but keeping the proportions preserves the balance of responsiveness and anchoring.