Absolute Strength Indicator
The trend following super tool. It really works in Forex and other markets. Compatible with all timeframes. Indicator doesn’t repaint. Try now!
Description
The Absolute Strength Indicator is designed for using with trend-following trading strategies.
The purpose of this technical indicator is to determine the direction and strength of the trend. To do this, it takes into account:
- readings of RSI or Stochastic oscillators;
- bullish and bearish progress on the market during the specified period.
As a result of its work, the Absolute Strength indicator displays 2 solid and 2 dashed lines in a separate window under the price chart.
The interpretation of the main solid lines is very simple:
- If the red line is above the green line, it means that the trend is bearish.
- If the green line is above the red line, it means that the trend is bullish.
- The more distance between the lines, the stronger the trend.
- If the line get narrower, it means a weakening trend.
In addition to the main solid lines, the indicator displays dashed signal lines.
Signal lines perform an assisting function for finding accurate entry and exit points.
Buy Signals by Absolute Strength Indicator
When the green line crosses the red line upwards – this gives a basic buy signal. Place a protective stop-loss under the previous local low.
Use the crossovers of the main and signal lines (shown by the blue arrows) as a trigger to:
- trail the stop-loss;
- add to a long position;
- reduce the long position.
Sell Signals by Absolute Strength Indicator
When the solid red line crosses the green line upwards – this gives a basic sell signal. Place a protective stop-loss above the previous local high.
Use the crossovers of the main line and the signal line in red as a trigger to:
- trail stop-loss;
- add to a short position;
- cutting of the short position.
Conclusion
The Absolute Strength Indicator for Metatrader 4 helps you trade in a trend. It doesn’t repaint.
The indicator uses data from RSI and Stochastic oscillators to build 2 main and 2 signal lines:
- The main lines give simple signals about the strength of the trend and its direction – bullish or bearish.
- Signal lines give more accuracy in finding entry and exit points.
The Absolute Strength Indicator for Metatrader 4 allows you to:
- track trends fully automatically;
- select the settings so that the indicator best suits your personal trading style;
- analyze signals on history.
Be aware, the Absolute Strength Indicator for Metatrader does not guarantee the best buy and sell signals ever. Like many classic trend-following tools, this Indicator will also give you false signals – especially during long flat periods.
Therefore, take care that trading with this indicator will not harm your deposit. To do so, first train trading on a demo account with a preferable broker. Also:
- consider combining indicator signals with other technical analysis tools;
- combine signals on daily chart with signals on intraday chart;
- focus on sell signals near resistance zones and buy signals near support zones.
Download the Absolute Strength Indicator for MT4 for Free Now!