The absolute strength signal Forex indicator works similar to its histogram version.
Instead of using an histogram, this absolute strength signal MT4 version uses 2 technical lines, a green and red one.
The indicator appears underneath the main MT4 activity chart.
It uses two methods to achieve this: the RSI method and Stochastic method.
Trade with it as follows:
- Open a buy trade if the green absolute strength indicator line crosses the red line upward. The trend is now bullish.
- Open a short trade if the red absolute strength indicator line crosses the green line upward. The trend is now bearish.
Use this indicator for short-term trading purposes.
It’s recommended to combine it with a longer-term trend following Forex indicator and then only open trades in the overall trend direction.
This will increase trading performance.
Feel free to play with the input parameters.
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Absolute Strength Signal Indicator Chart
Here’s an example of how the indicator should look like when loaded onto the Metatrader 4 chart.
You can apply the indicator to any currency pair and time frame of your preference.
Finding Buy and Sell Triggers With Absolute Strength Signal Technical Analysis Chart Indicator
Below is an example of how to buy and sell currency pairs with this Forex indicator:
Buy Trigger: Initiate buy trade when the overall trend, defined by the longer-term trend following indicator is upward and the green Absolute Strength Signal indicator line crosses above the red one from below.
Place a stop loss below support, or use your own stop loss strategy.
Aim for reward/risk 1.5:1 ratio or better, or close the trade for a fixed profit target, for example 17 pips on the 1-minute scalping chart.
Sell Trigger: Initiate sell trade when the overall trend, defined by the longer-term trend following indicator is downward and the red Absolute Strength Signal indicator line crosses above the green one from below.
Place a stop loss above resistance, or use your own stop loss strategy.
Aim for reward/risk 1.5:1 ratio or better, or close the trade for a fixed profit target, for example 30 pips on the 15-minute day trading chart.
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Use RSI, use Stochastic, signal period, smooth period, moving average type, price, colors, width, style.
- Trend indicators (Moving Average, Bollinger Bands, ADMI,…)
- Price action methods and techniques
More Info About This Indicator
Tradable Currency pairs: Any
Trading Platform: MT4
Time frames: M1, M5, M15, M30, H1, H4, D1, W1
Indicator Type: short-term trend
Copy and paste the indicator in the MT4 indicators data folder.
Then restart the MT4 terminal and attach it to any chart.