Absolute Strength Indicator
Trend-following super tool. It really works in Forex and other markets. Compatible with all timeframes. The indicator does not repaint.
Description
The Absolute Strength indicator is designed to be used with trend following trading strategies.
The purpose of this technical indicator is to determine the direction and strength of a trend. For this, the following are taken 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 below the price chart.
The interpretation of the main solid lines is very simple:
- If the red line is higher than the green one, it means that the trend is bearish.
- If the green line is higher than the red one, it means the trend is bullish.
- The greater the distance between the lines, the stronger the trend.
- If the line becomes narrower, it means the trend is weakening.
In addition to the main solid lines, the indicator displays signal lines as dotted lines.
Signal lines perform an auxiliary function for finding exact entry and exit points.
Buy Signals by Absolute Strength Indicator
When the green line crosses the red line from the bottom up, this gives a basic buy signal. Place a protective stop loss under the previous local low.
Use the intersections of the main and signal lines as a trigger for:
- track stop loss;
- add to long position;
- Cut the long position.
Sell Signals by Absolute Strength Indicator
When the solid red line crosses the green line from bottom to top, it gives a basic sell signal. Place a protective stop loss above the previous local high.
Use the intersections of the main line and the red signal line as a trigger for:
- monitor stop loss;
- add to short position;
- Closing a 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 draw 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 allow you to more accurately locate entry and exit points.
The Absolute Strength Indicator for Metatrader 4 allows you to:
- track trends fully automatically;
- choose settings to best suit your personal trading style;
- analyze signals in history.
Keep in mind that the Absolute Strength Indicator for Metatrader does not guarantee the best buy and sell signals. Like many classic trend following tools, this indicator will also give you false signals, especially during long flat periods.
Therefore, make sure that trading with this indicator does not harm your deposit. To do this, first practice trading on a demo account with your preferred broker. Also:
- consider combining indicator signals with other technical analysis tools;
- combine daily chart signals with intraday chart signals;
- Focus on sell signals near resistance zones and buy signals near support zones.
Download the Absolute Strength Indicator for MT5 for free now!
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