Derivative Oscillator is a Forex Trading indicator. The Derivative Oscillator is a very simple Forex Trading indicator.
The Derivative Oscillator should be used combined with other Indicators as well. This is just an Oscillator indicator, it will tell you about the Momentum of the Market. Although this indicator can be used in any kinds of Market conditions, you are recommended to Trade in a Trending Market so that you will have the odds of winning in your favor. You should be very careful while trading with Derivative Oscillator as this system can give you false signals many times. So, you should consider many other factors rather than just jumping in a Trade solely based on this indicator.

Derivative Oscillator is nothing more than a Histogram chart that fluctuates in Positive and Negative territory.
When the histogram is in Negative territory, it indicates Bearish sentiment in the Market while when the histogram is in Positive territory; it indicates Bullish sentiment in the Market.

Source : Dominic Walsh