The StochRSI Basic Indicator for MT4 is a combination of two of the most popular Metatrader indicators, the RSI (Relative Strength Index) and Stochastic. This means that the indicator gives the most reliable buy and sell trade signals compared to the Forex signals provided by the RSI and Stochastic indicators alone. The overbought and oversold levels of this indicator provide the best exit and entry indicators for bull and bear price trends.
This indicator is ideal for both experienced and new forex traders. Forex traders who are new to the market can use these signals to trade to determine the most reliable trading signals. However, experienced forex traders can use this indicator to verify and double-check trading signals from the independent RSI as well as stochastic indicators. In addition, overbought as well as oversold indicators can be utilized to create automated trading systems. In addition, it is free to download and easy to install.
StochRSI Basic Indicator for MT4 Trading Signals
Action of the indicator StochRSI. The indicator shows the Stochastic line in gold and the RSI line in red. In addition, both the Stochastic and RSI indicators are shown as white dots.
The indicator gives forex trading signals based on overbought or oversold levels. Forex traders can enter a buying position when the GOLD and RED lines cross the oversold level of 20 and then move up. This is a signal that a bullish price trend exists, so traders are able to hold their positions and take advantage of the current trend. The most effective way to exit this strategy is to profit from the opposite signal, which is an overbought signal. Instead, the trader can place an order to stop trading below the previous low of the swing.
Likewise, when the indicator crosses the overbought threshold and starts to move lower, it signals a bearish trend in the market. Therefore, forex traders are able to make a sell trade and then hold it until the indicator is at an oversold point. During the time frame of the trade, there may be several lows and highs in the price. In order to get the best performance, traders should use indicators to detect trends and follow them.
Each currency pair has different characteristics and forex traders should play with and backtest different indicators to choose the most appropriate one. The input of indicators plays an important role in providing trading signals for any trading strategy.
The StochRSI indicator used in the basic version of MT4 actually provides better trading signals and results than trades using traditional indicators. However, this is because bull and bear trading signals in Forex are indeed rarer than those using the RSI or Relative Strength Index or Stochastic. Trading signals tend to be more stable, react more effectively and allow Forex traders to ride the BULLISH or BEARISH markets.