Coppock Indicator
The Coppock indicator for MetaTrader 4 identifies optimal trend continuation/reversal zones of a financial asset.
Description
The Coppock indicator for MetaTrader 4 is a trend-following tool that attempts to catch the beginning of a new trend. Its algorithm uses the Rate-Of-Change of an asset to determine the changes in the price and the long-term trend direction of the market.
The indicator was originally designed for analyzing the stock market; however, it has been modified to also analyze currency pairs in the forex market. It’s a great forex trading asset suitable for both novice and advanced traders because it is particularly useful in identifying an optimal zone to join an already-established trend.
What is the Coppock strategy?
The trading strategy behind the Coppock indicator entails that a financial asset is about to print a new trend when the indicator’s bar rises and closes below or above the zero line. Thus, it signals the beginning of a potential bullish or bearish trend if a signal bar rises from below/above the zero line, respectively.
Coppock Indicator Buy and Sell Signals
The above image depicts the action of the Coppock indicator on the EURUSD currency pair in the H4 timeframe. The indicator initiates a buy/sell immediately after the first histogram bar crosses above/below the zero line.
Furthermore, the signal generated by the indicator would be considered to be valid when it aligns with the overall trend of the market. For instance, you may open a buy/long trade position after the first signal bar crossover above the zero-line in a bullish market sentiment.
Conclusion
The Coppock indicator for MT4 is suitable for identifying optimal entry zones in the trending market. Besides, it would be invaluable mostly to a novice/intermediate forex trader that still struggles on how to find a suitable trade entry zone. Finally, the indicator is free to download.