The Overbought IO indicator (OBIO) for MetaTrader 5 is a proprietary technical indicator that can be applied in various conditions for an improved analytical understanding of the markets. In this article, we explore how the OBIO indicator, primarily being a momentum-based indicator, can be highly efficient in potentially predicting a market breakout past a consolidation phase.
The Role of the Middle Band
As the market remains within a tight consolidation phase, it is prevalent to find price oscillating at and around the middle band of the OBIO indicator, suggesting the continuation of weak sentiment and confidence from traders.
This scenario, however, poses a subtle change just before the market appears ready to breakout. For the trader who understands market dynamics and the OBIO indicator,