Major Lows Oscillator

Description

The Major Lows Oscillator is a custom technical indicator designed to identify significant low-price areas by normalizing the current closing price relative to recent lowest lows and highest highs. The oscillator calculates a normalized price percentage over a configurable lookback period, applies exponential moving averages for smoothing, and inverts the result to highlight potential market bottoms.

Calculation Details

• Lowest Low Lookback: Finds the lowest low over a user-defined period (default 100 bars).
  
• Highest High Lookback: Calculates the highest high over a short period (default 1 bar), providing a dynamic normalization range.
  
• Normalization: Normalizes the current close within the range defined by the lowest low and highest high, scaled to 0-100.
  
• Smoothing: Applies a 10-period EMA, inversion, and weighted smoothing combining the last valid value and current oscillator reading.
  
• Final Output: Applies a final EMA (period 1) and inverts the oscillator (100 - value) to emphasize major lows.
  

Features

• Customizable midline level for signal alerts (default 50).
  
• Visual midline reference line.
  
• Alerts trigger on oscillator crossing below midline for automated monitoring.
  

Usage
Useful for complementing existing setups or integration in algorithmic trading strategies.

Changing the input parameters opens new ways to leverage the asymmetric range concept, allowing adaptation to different market regimes and enhancing the oscillator’s sensitivity and utility.

Examples of input combinations and their potential purposes include:

• Extremely Asymmetric Setting: Lowest Low Lookback = 200, Highest High Lookback = 1
  Focuses on deep long-term lows contrasted with immediate highs, ideal for spotting strong oversold levels within an otherwise bullish short-term momentum.
  
  
• Symmetric Lookbacks: Lowest Low Lookback = Highest High Lookback = 50
  Balances the range equally, creating a normalized oscillator that treats recent lows and highs with the same weight — useful for markets with balanced volatility.
  
  
• Short but Equal Lookbacks: Lowest Low Lookback = Highest High Lookback = 10
  Highly sensitive to recent price swings, this setting can detect rapid shifts and is suited for intraday or very short-term trading.
  
  
• Inverted Extreme: Lowest Low Lookback = 1, Highest High Lookback = 100
  Highlights very recent lows against a long-term high range, possibly signaling quick dips in a generally overextended market.
  
  

Inputs

• Midline Level: Threshold for alerts (default 50).
  
• Lowest Low Lookback Period: Bars evaluated for lowest low (default 100).
  
• Highest High Lookback Period: Bars evaluated for highest high (default 1).
  

Alerts
Configured to trigger once per bar close when the oscillator crosses below the midline level.

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Disclaimer
This indicator is for educational and analytical use only.