McClellan Oscillator is a forex technical indicator used in technical analysis. McClellan Oscillator Indicator was developed by Sherman and Marian McClellan. McClellan oscillator is a breadth indicator and is based on the advancing and declining issues.

Breadth is defined as the balance between advancing issues (all stocks up at least a penny on the day) and declining issues (all stocks down by at least a penny). In a strong market, advancers will usually overwhelm decliners by a significant margin. The opposite is true when a market turns weak.

The McClellan Oscillator can be extremely effective when trading bullish and bearish reversal patterns. The indicator reveals oversold and overbought conditions similar to other oscillators such as Stochastics. These overbought and oversold indicators are not incorporated in the Market Situation scoring system for the sake of simplicity.

Nevertheless, they are good signals to watch for when trading reversal price patterns. Readings between +50 and +70 signal overbought market conditions in which bearish reversal patterns have a higher probability of succeeding.

It’s better to perform buying after a number of oscillator’s uptrends from the low values or market strength recovery. The oscillator going through zero line upwards or downwards indicates buy or sell signals for a medium term accordingly.