Hello,
Internal Bar Strength Oscillator (IBS Oscillator) is a client side VertexFX VTL script. It is calculated as moving average of
(High-Low)/(Close-Low) * 100 and plotted as an oscillator. IBS Oscillator is similar to other oscillators like stochastic and
RSI. It is used to find oversold and overbought market conditions. IBS value above 60 level signals overbought market
conditions and consolidation or trend reversal is likely to follow. Oscillator value below 40 indicates oversold market
condition and consolidation or trend reversal is likely to follow.
IBS Oscillator can be used for divergence trading also. Divergence between price and the IBS oscillator as the market makes new
high or low is an indication that the prevailing trend is losing momentum and trend reversal may follow. It can be used as a
stand alone indicator to trade reversals or can be used as a confirmatory indicator together with other indicators.
The Oscillator levels 40 and 60 is marked by the horizontal lines in the oscillator pane. The IBS oscillator can be customized
with the parameter “Per”, the moving average period.
ibs.zip (2.29 KB)