Like the Stochastic Oscillator, the DYNAMIC RANGE INDICATOR™ is also based on identifying period where price is Overbought or Oversold.
In the Stochastic Oscillator, the price is compared to its lowest low and highest high from 9 periods ago. A reading above 80 is overbought, and a reading below 20 is oversold.

In ranging environments, this is a good indicator that produces good results. This is because in ranges price moves from Support to Resistance and vice versa. However, in trending periods the Stochastic Oscillator fails, because it doesn't take into account the fact that the range was already broken. Comparing the price to its boundaries in Trend phase is not good for generating trading signals.

However, the DYNAMIC RANGE INDICATOR™ also works in trending periods, automatically disregarding all trend phase and concentrating on the turning points - the beginning and end of the trend. In this way you don't need to gauge manually between these phases of the market - DYNAMIC RANGE INDICATOR™ does that analysis for you, presenting you simple and easy signals to follow.

In the following chart a trend prevailed in the EUR\USD. Where all overbought-oversold indicators like the Stochastic Oscillator and CCI would fail and generate whipsaws, the DYNAMIC RANGE INDICATOR™ performed well and generated profitable signals: