As with any indicator all it really provides are breadcrumbs or if you will, a post. Something visually attracting to help you remember the next time it happens. If you are looking at an indicator without context you are betting on three things: you saw it first, others will see it soon and react, and it is the most important data point. So as you can see, that is a bet is risky.
Buying an oversold market or selling an overbought market is generally best in a distributing, range bound market. In an uptrend buying an oversold markets is the best. In a downtrend selling an overbought market is the best. So you can where I am going with this.
I am not against any indicator, they all serve their purpose. And I would say that oscillators are the closest you can get to current looking indicator depending on the settings. I know it is merely semantics but it is incorrect to say that the market is oversold/overbought. The indicator is at a high level or low level in relationship to where the market is trading, is more accurate.
Remember a market can stay overbought or oversold longer than you can stay solvent.
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