A support/resistance indicator that has many fervent proponents is known as the Ultimate Oscillator.

It was developed by a legendary stock and commodities trader named Larry Williams. He has over forty years of trading experience and he has documentable results to back his claims. The Ultimate Oscillator does adapt to the forex market.

Without attempting to delve into math that numbs the mind, the concept behind this oscillator is that it combines three levels of support and resistance. The purpose behind this is to minimize the tendency present in some other indicators to supply false signals that can cause premature trade entry or exit.

It can be applied to all time frames. A forex day trader could use it on a daily chart, all the way down to the fractional minute charts. The oscillator is plotted by a single line that has a range of 1 to 100.

The signals generated by the Ultimate Oscillator are based on divergence, which is the condition that exists when price and the oscillator are not sychronous. A bullish buy signal is seen when actual prices reach a new low, but the oscillator does not.

It also looks for conditions where the market has been oversold to generate a buy signal.

Bearish sell divergence is present when prices reach a new high, but the oscillator does not.

Another sell signal occurs when the indicator either rises above 50 (center line), then falls below 45, or when it penetrates into overbought territory at 70.

The Ultimate Oscillator indicator also supplies parameters for exiting an existing trade. A long position is closed when a sell signal occurs. A short position should be closed when a buy signal is generated. The Ultimate Oscillator is so well known, given the status of its developer, that it can suffer from overuse.

Larry Williams continues to produce new indicators and approaches to forming trading strategies. He derives income from selling these, but it is worth noting that he does actually participate in trading, unlike many vendors of indicators, trading platforms and tactics.

The fact that he does continue to innovate is certainly indicative of the necessity for all traders to continuously update their skills with the thought in mind of learning to develop trading techniques on their own.