IMI Indicator
IMI indicator is the best overbought/oversold MT5 indicator. It is a momentum indicator that you can use to trade with overbought and oversold levels.
Description
The IMI (Intraday Momentum Index) indicator for MetaTrader is a short-term trading tool for trend analysis. It is based on the data of the Relative Strength Index (RSI) and the opening/closing price of the candle for a certain period.
The indicator works as an oscillator that fluctuates between two price extremes (overbought and oversold zones). The IMI indicator essentially helps you determine the levels at which an asset’s price could reverse.
The indicator marks level 70 as an overbought zone and level 30 as an oversold zone. The price is expected to reverse as soon as it reaches one of the two extremes (70 and 30 levels).
The IMI indicator is ideal for use in a trending market to minimize false signals. In addition, it is also recommended to use it in sync with price action/other technical indicators to enter a trade.
In addition, the indicator is suitable for beginners and experienced forex traders. In addition, it is also recommended for scalping and day/intraday trading.
How To Trade With The IMI Indicator
The screenshot above shows how the indicator will look on your chart once installed. It also illustrates how to identify a high probability trade setup.
Signal to buy: First, make sure the market is moving up. Next, you should wait until the indicator red line touches the oversold level. You can then enter a BUY/LONG position after the price action forms a bullish reversal candlestick pattern (eg bullish engulfing).
SELL signal. First, make sure the market is moving down. Next, you should wait until the indicator red line touches the overbought level. You can then enter a SELL/Short position after the price forms a bearish reversal candlestick pattern (eg bearish engulfing).
Conclusion
The IMI indicator for MT5 is the best trend reversal tool for determining overbought and oversold levels in the market. However, the indicator is not immune to false signals, since no indicator is the Holy Grail. Hence, it is recommended to use it in a trending market. Finally, the indicator is free to download.
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