The Cyber Cycles Oscillator is a study designed by John Ehlers; it is used for isolating the cycle component of the market from its trend counterpart. Unlike the RSI, Cyber Cycles Oscillator's wave has a variable amplitude.
The basic rule of utilizing this study is using crossovers with the plot shifted back as Buy/Sell signals, however, one can benefit from applying the Inverse Fisher Transform to the oscillator. For more information on calculation of the study and using the Inverse Fisher transform, refer to John Ehlers' article in May 2004 issue of "Technical Analysis of Stocks & Commodities".
||The coefficient used in wave component calculation.|
||The price on which the calculations are performed.|
||The Cyber Cycles Oscillator plot.|
||The zero level.|
||The CCO plot shifted one bar back; crossovers of the two plots suggest Buy/Sell signals.|
*For illustrative purposes only. Not a recommendation of a specific security or investment strategy.