Prime Number Oscillator - PNO

Indicator of the week1

Prime Number Oscillator

The prime number oscillator indicator indicates the nearest prime number, either at the top or the bottom of the series and plots the difference between that prime number and the respective series.

PNO can be used:

1- As a trend indicator: wider flat sections at the top means we are in an uptrend. Wider flat sections at the bottom indicate a downtrend.

2- Entry signal

Only buy in an uptrend and sell in a downtrend.

Buy signal in an uptrend: if the indicator remains flat for 2 days in a row at the bottom then you may go long.

Sell signal in a downtrend: If the indicator remains flat for 2 days in a row at the top then you may go short.

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Prime Number Bands

1- Trend analysis: 

Higher prime numbers mean we are in an uptrend. When the bands are moving upward direction, the market has a Bullish Direction. 

Lower and lower prime numbers mean we are in a downtrend. (If the bands are moving Downward direction) 

2- Volatility: 

Narrower bands mean stock price is less volatile. 

Wider bands indicate share price is volatile. 

3- Signals:

 In an uptrend look for a spike down in prime band for a long position entry.

 In a downtrend look for a spike up in a prime band for a short position entry.(Not my favourite scenario, though!)

Price Rate Of Change Indicator (ROC)

Signals: 

• In an uptrend look for the indicator reversal points below zero to go long. 
• In a downtrend look for the indicator reversal points above zero to go long. 

 Trend identification: 

• A rising ROC typically shows uptrend and crossing above zero line confirms the uptrend. 
• A falling ROC typically shows downtrend and crossing below zero line confirms the downtrend.