The Robby DSS Forex.ex4 is a variant of the DSS oscillator that was developed by a trader named Robby. It is a popular custom indicator used in Forex trading, and it combines the Stochastic indicator with an exponential moving average (EMA) to identify oversold and overbought zones.
The Stochastic component of the Robby DSS oscillator calculates the momentum of the price action by comparing the current price to the highest high and lowest low over a specified period, typically 8 periods. The resulting value is expressed as a percentage, with a value of 100 indicating that the current price is at the highest high of the period and a value of 0 indicating that the current price is at the lowest low of the period.
The EMA component of the Robby DSS oscillator is calculated by taking the average of the closing prices over a specified period, typically 13 periods. The EMA is used to smooth out the price action and provide a more reliable signal.
The combination of the Stochastic and EMA components of the Robby DSS oscillator produces an oscillator that oscillates between 0 and 100, with overbought conditions occurring when the oscillator is above 80 and oversold conditions occurring when the oscillator is below 20. Traders can use these zones to identify potential buy and sell signals.
It is important to note that while the Robby DSS oscillator can be a useful tool in Forex trading, it should not be used in isolation. Traders should always use proper risk management and combine the oscillator with other technical analysis tools and indicators to develop a comprehensive trading strategy.