To fully understand the Carnazzi Universal Oscillator, we need to understand some simple concepts from Digital Signal Processing (DSP). On the DSP ground, the Carnazzi Filter is what we call a “lowpass filter” : it rejects high frequencies above the cut frequency. The Carnazzi Universal Oscillator is the transformation of this filter into a “highpass filter” : it rejects low frequencies under the cut frequency. These two tools are designed to work in synergy. More, the CUO is coupled with a Probability Density Function (PDF) modificator to ensure cohesion between different timescales analysis. The PDF modificator is drived by the k parameter of the filter

How to use the CUO ?

The CUO is an excellent candidate as a momentum indicator. I have found two nice ways of using the CUO :

• Scalping style : you can emulate the Schaff Trend Cycle or the Laguerre RSI (but smoother, faster, and more accurate !) with the 14 period settings, and k = 5. Adequate for very quick operations : buy lows and sell on tops of the CUO
• Swing style : you need 2 CUO in this case. The first one is a gentle cycle indicator with period = 20 and k = 2. The second CUO is period = 50 and k = 5 and act as a trend indicator. As CUO is extremely fast, the CUO crosses are extremely pertinent entries, especially at the top and bottom of the oscillator.

Scalping style example :

Swing style example :

I am sure that this tool will bring you the greatest satisfaction and I wish you an excellent trading.

Best regards,

Bruno.