- A free highly effective and robust indicator
- Detect market movements OverBought and OverSold
- With the indicator, you can see when the market could potentially be depleted, and this will greatly improve your trading results
- Useful for all currencies and terms
- Compatibility: MetaTrader 4
- Regularly updated for free
How to trade the indicator profitably:
The interpretation of the indicator is simple. The indicator shows the period when the market movement could be exhausted or is coming to an end. Thanks to this, we can trade more accurately, execute timely operations and make higher profits.
Overbought means a period in which there has been a significant and consistent upward movement in price without much pullback.
On the other hand, overselling describes a period in which there has been a significant and consistent downward movement in price without much pullback.
The market is considered overbought when the indicator rises above the 70 levels. A sell signal may be generated.
The market is considered oversold when the indicator falls below the 30 levels. A buy signal can be generated.
In our experience, currency pairs are traded as scales’ bowls (currencies are compared to each other). That is why there is an expectation that currency pairs will make retracements. Also, the price cannot move in one direction forever. Currency pairs that are overbought or oversold are more likely to reverse direction but could remain overbought or oversold for a long period.
There are two ways to trade the indicator:
A) Take the SELL signal when the indicator falls below the 70 levels or take the BUY signal when the indicator rises above the 30 levels. The best method here is to look at the whole context of price movements and the action of the price. If you feel and see that the market is receding, now is the right time to trade!
B) Close your BUY trades as soon as the indicator line turns red and close your SALE trades as soon as the indicator line turns green.