Colored Stochastic Buy/Sell Metatrader 4 Forex Indicator
The Colored Stochastic Buy/Sell Metatrader 4 indicator is a momentum oscillator that allows traders determine when the dominant trend is about to reverse.
As an enhanced version of the widely used Stochastic Oscillator, the Colored Stochastic indicator adds colored modification to the %K line.
Meanwhile, it is a known fact that the Stochastic Oscillator parades two lines, which is also true for the Colored Stochastic indicator i.e. the dotted %D line, and filled colored %K line.
Buying and sell pairs with this indicator is utterly simple!
- Both lines that are found within the Colored Stochastic indicator are similar to those of the MACD indicator, therefore, one of the lines is a bit faster than the other, and in this case, the %K Period is faster than the %D period.
- The indicator is known to scale from 0 to 100, and in so doing, can offer clues as to when the market is overbought or oversold.
- When the %K line is filled red and lime colored segments, it is an indication that traders should be on the lookout for overbought or oversold market conditions.
Feel free to explore the Colored Stochastic Buy/Sell Forex indicator’s different parameters and settings to create your own personalized indicator setup.
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Colored Stochastic Forex Indicator Chart (EUR/USD M30 Chart Example)
Here’s an example of how the indicator should look like when loaded onto the Metatrader 4 chart.
Finding Buy and Sell Triggers With The Colored Stochastic Buy/Sell MT4 Indicator
Buy Signal: Go long when the faster %K (multi-colored filled line) and the slower %D (dotted line) gets printed above the 50.00 horizontal level.
When the blue line of the Alligator indicator crosses below the lime and red lines in a bottom up manner, it is a buy confirmation.
Sell Signal: Go short when the faster %K (multi-colored filled line) and the slower %D (dotted line) gets printed below the 50.00 horizontal level.
When the blue line of the Alligator indicator crosses above the lime and red lines in a top downward fashion, it is a sell confirmation.
Exit buy trade: Close all buy orders if while a bullish trend is running, the faster %K line of the Colored Stochastic indicator breaks below the 50.00 horizontal signal level. Else, close all buy orders when the lime and red lines of the Alligator indicator intersects.
Exit sell trade: Close all sell orders if while a bearish trend is ongoing, the faster %K line of the Colored Stochastic indicator surges above the 50.00 horizontal signal level. Else, close all sell orders when the lime and red lines of the Alligator MT4 indicator intersects.
Tips: When trading with the Colored Stochastic indicator, signals should only be taken when they’re in the same direction as the trend.
This is to forestall false positives that’s inherent in the parent Stochastic Oscillator.
It is critical to adopt the overall market trend as a price filter, while also combining other technical indicators like the Alligator in designing profitable strategies.
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More Info About This Indicator
Tradable Currency pairs: Any
Trading Platform: MT4
Time frames: M1, M5, M15, M30, H1, H4, D1, W1
Indicator Type: Oscillator
Copy and paste the indicator in the MT4 indicators data folder.
Then restart the MT4 terminal and attach it to any chart.