What Is a Klinger Oscillator?

The Klinger oscillator is used to forecast long-term money flow trends while simultaneously identifying short-term variations. Created by Stephen Klinger in 1977, this technical indicator also forecasts price reversals in a financial market by comparing volume to price in great detail. The number of units of an asset/stock/cryptocurrency that are traded per unit of time is referred to as volume.

Klinger Oscillator Trading Strategy

The Klinger oscillator consists of two lines. The blue line is the KVO line and the green line represents the EMA average. The 13-period moving average is the standard signal line for determining whether to purchase and sell. The indicator is based on the notion of volume moving through an asset and how it affects both short-term and long-term price levels. As with every other technical indicator, the key point is to watch the crossover. In the chart below, notice how the blue line crossed the green line and the price of the asset also fell with it.

Where:

• KO= Klinger Oscillator
• VF= Volume Force
• Volume Force =V×[2×((dm/cm)−1)]×T×100
• V= Volume
• T= Trend
• Trend=+1 if (H+L+C)>(H_-1 +L_-1 +Cv_-1)
• Trend= −1 if Above is < or =
• H= High
• L= Low
• C= Close
• dm= H−L
• cm=cm_-1 + dm if Trend = Trend_-1
• cm=dm_-1 + dm if Trend =/= Trend_-1

Traders who use the Klinger oscillator can immediately initiate another counter position after closing their initial one in the market, which means that they are always in the market as the open and close signals are identical.

However, the Klinger oscillator is a short-term trading technique that works well mostly on lower time frame charts. This is because when you are in the market for a long period, you collect large volumes, resulting in numerous losses and gains. Here, the end goal is to maintain a better win-to-loss ratio when you close all your positions.

The most popular technique used to increase the accuracy and relevance of the Klinger Oscillator is to combine it with other technical indicators especially the stochastic oscillator along with price channels, trend lines, or triangles that confirm the price breakout or breakdowns. It is also advisable to use a bunch of other indicators, like MACD, RSI, Aroon Indicator, before making a buying or selling decision in the financial markets.