What does he do? This indicator gives buy or sell signals, based on the retracement of the short and medium period moving averages.
What is it composed of? The middle line is the axis also known as the pullback region. When price is in a strong trend, you'll se a regular bouncing (pullback) up to the 20 level line a downtrend, as well as a regular pullback down to the -20 level line on an uptrend. There is also a 40 overbought and -40 oversold regions in which a reversal is most likely to occur. Depending on the timeframe you trade, you can change the value of this levels as you wish.
How does it work? For example: if a price is in an uptrend... 1st: if the price pullsback to the small (9) or medium (21) moving average then 2nd: see if the indicator will pullback close to the 0 level or the -20 levelcheck. If it does 3rd: see if there is no diverncey between the price and indicator. If not 4th: put a buy position at the maximum of the buying candle and wait for the price breakout this signal line 5th: the surf the profit.