The LBR 3-10 oscillator was presented by Linda Bradford Raschke. It is a MACD built with an SMA(3), SMA(10) along with a signal line applying an SMA(16).
Indicator Description
Raschke’s LBR 3 10 Oscillator is essentially the Moving Average Convergence Divergence (MACD) indicator. The difference is in the type of moving average used. The LBR 3 10 Oscillator applies simple moving averages whereas the MACD uses exponential moving averages.
The indicator calculates the difference between a fast vs. slow (3 and 10 bar) simple moving averages. It then adds a 16 bar simple moving average of the difference. Finally, the LBR 3 10 Oscillator uses the Closes as the input from the lookback period.
The LBR 3/10 Oscillator can be used together with higher timeframe trend filters, statistical tools and range / volume analysis. You may for example consider the Daily Regression Channel, the Efficiency Ratio, Rainbow Filter, the Moving Average Wave or review our Indicator Spotlight on the Heikin Ashi indicator. The Modified Z-Score can be used to identify extreme readings when the LBR 3/10 is used as input series, effectively normalizing these values. Finally, Relative Range / Relative Volume readings may confirm momentum setups when the cumulated relative range / volume are above average. The Relative Volume / Relative Ranges indicators were discussed in our Indicator Spotlight newsletter.
Other library momentum oscillators
The Indicator Library also contains a number of standard momentum oscillators such as the Awesome Oscillator, Acceleration Deceleration, RSI, Double Smoothed Stochastics, the Projection Oscillator and the Traders Dynamic Index (TDI). The Awesome Oscillator and the TDI indicator specifically was reviewed at length in our Indicator Spotlight. These are built with trend indicators, tracking short-term overbought or oversold conditions. I.e. when the oscillator value approaches the upper extreme, it indicates overbought, and as it approaches the lower extreme, oversold.
Furthermore, the library also has a category for advanced oscillators featuring among others the Connors RSI, the Laguerre RSI and the MACD BB Lines. These tools build on the same concept as the standard momentum oscillators, but with a higher degree of sophistication. In general, they allow for added value approaches, utilizing a set of more complex algorithms.
Finally, the Ichimoku Kinko Hyo may also be considered as a momentum indicator.
The LBR 3/10 oscillator is available for NinjaTrader 8.
