The SMI Ergodic Oscillator is a powerful tool that helps traders gauge market momentum by showing the difference between the True Strength Index (TSI) and its exponentially smoothed signal line.
There are three key parameters you can tweak:
- Long Length - This is the main smoothing period for calculating the TSI.
- Short Length - This serves as the secondary smoothing period for TSI calculations.
- Signal Line Length - This determines the smoothing period for the signal line in the SMI calculation.
The SMI Ergodic Oscillator provides valuable signals based on level crossings:
If the oscillator stays below the zero line for an extended period and then crosses it upward, it suggests a good opportunity to enter a long position.
Conversely, if the oscillator stays above zero for a while and then crosses downward, it signals a favorable moment to consider opening a short position.
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