DVO

Oscillator David Varadi (David Varadi Oscillator, DVO) dynamically determines overbought and oversold levels, even when the price volatility. It has been developed (Varady, 2009) as a short-term oscillator (maximum smoothing period 5), showing a decrease of intraday highs and lows over time.

DVO indicator may be used to create unique weighting schemes that work best for each class of financial instruments and determine weights for the local density tool. It captures a different cycle length, amplitude distribution, and returns the tool. The result is normalized using a percent evaluation function for re-scaling indicator based on historical values ​​of the distribution.

DVO(Period, [O, H, L, C], [Day0, Day1, Day2, Day3, Day4])

1. the history of the period to calculate the percentage


2. Various weight prices. The sum of the weights is 1.


3. Smoothed weight per day, and 5 days of history, including today. Again, the sum of all weights is equal to 1.

interpretation of values

The general principle is that the tool is overbought above 50% and below 50% pereprodannosti, but for each individual class of tools and / or financial instrument is searched for the best level. Common zone perekuplennosti levels above 70% and below 30% pereprodannosti.

Other indicators DV

DV2 - an alternative to the popular RSI indicator (2) is based on DVO. In fact, it is one particular setting DVO, which was originally developed for SPY. It was found in this case a small opening value, and the optimum period was about 50/50 weighting for the past two days. As it turned out, this weighting scheme worked very well and almost all traded funds on the market and most of the shares.

DV2 = DVO(252, [0, 0.5, 0.5, 0], [0.5, 0.5, 0, 0, 0])
The screenshot shows a DVO LED working on AUDUSD with the default settings. The unique weighting scheme must be created for AUDUSD, where the return from DVO will be maximum.