Ergodic Indicator
MT4Also Available for MT5Ergodic indicator is a free MT indicator that shows the market direction. It is also suitable for detecting trend reversal.
Description
The Ergodic indicator looks similar to the MACD indicator. It features bar charts and a smooth moving average oscillating around a zero line. Additionally, the indicator forms in a separate window below the price chart.
You can use the indicator on any time frame to trade any instrument, whether scalping or a long-term investment.
How to Use Ergodic Indicator to Trade
The ergodic indicator is one of the simplest indicators. You simply need to wait for the indicator to cross below or above the zero line. The area above the zero line is bullish, while the bearish zone is above the centerline.
Buy Signal
Buy when the indicator cuts the zero line from below and moves upwards to match a bullish price action.
Sell Signal
Sell when the indicator drops and pierces the zero line from above.
Real Trading Example
The chart above shows the price movement for the Euro against the Japanese yen on a daily frame.
The first arrow shows the indicator bars form below the centerline. However, the indicator pierces the zero line from below and ascends above it, effectively giving a buy signal.
After some time, the indicator crosses below the line indicating bears have taken control of the market and traders should look to enter short positions.
Conclusion
Ergodic is an easy-to-use oscillator that gives straightforward buy and sells signals. Simply buy when the indicator crosses above the zero line and sell when it dips below the line. You can use this indicator to boost your trading strategy or confirm other strategies. It will prove helpful, especially if you are getting acquainted with the market movement.
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