This oscillator was developed by Larry Williams.

Its method of calculation is as follows:

Establish today's buying pressure (Bt), by subtracting the true low from the closing. The true low is the lowest between today's low and yesterday's closing;
Calculate the True Range (Rt), given by the higher of the following values: today's range (maximum minus minimum), difference between today's maximum and yesterday's closure, difference between yesterday's closure and today's minimum;
Add the buying pressure separately for the three-time intervals;
Do the same for the True Range;
Finally, divide the buying pressure by the True Range for each of the three cycles. Weigh this against factors 4, 2 and 1 and make the total sum.
The criteria of use are now obvious: they will be based mainly on the differences between price and indicator, combined with a reversal of the trend of the same oscillator.

When the Ultimate Oscillator is above the Zero-Line, or positive, this represents an uptrend or a bullish opportunity.

When the Ultimate Oscillator is below the Zero-Line, or negative, this represents a downtrend or a bearish opportunity.