Oscillator TrendlessOS was developed by Joe DiNapoli in the early 1980s and described in the book Trading with DiNapoli Levels. As well as other indicators developed by DiNapoli, Trendless oscillator is a supplement to the major instruments of desition taking - Fibonacci levels. However, according to DiNapoli's concept, Trendless indicator can be used as an independent trading instrument.
TrendlessOscilator = close – SMA (7, close)
Joe DiNapoli discribed major strategies of Trendless indicator application in active trading on the finacial markets. Out of five described strategies, three methods of indicator use are of great interest. They demonstrate that Trendless indicator is the most profitable technical indicator among other similar indicators.
- Trendless indicator may be used as a tool to close the deals. If the indicator reaches the overbought levels in the range 70 to 100%, the trade should be closed. Particular level is calculated individually for every asset on the basis of daily charts. Joe DiNapoli closes a trade if the indicator reaches the level of +90%. When the overbought level is reached, the price may slow down or reverse.
- Trendless indicator may be used as a filter for opening of a trade on the financial market. If the signal of a deal opening emerges when the Trendless indicator is above the level of the level of +65%, then it is not recommended to open a deal at all, as the price may experience indefinite price fluctuations. Joe DiNapoli recommends waiting for the next trading day (in terms of intraday trading) and if the signal is still preserved, then look more attentive at the level of Trendless indicator.
- As volatility indicator, Trendless oscillator may be used as indicator of accumulation of volatility and then the price jerk (the uprise of volatility). If indicator is near the level of 0% for a long time, then very strong accumulation is forming on the market, as the result it will lead to a price jerk. One should use such situations in trade, as indicating the timing actual for a deal.