The Chaos Oscillator Metatrader 4 forex indicator is great for scalping and day trading currency pairs.
Chaos provides you with short-term buy and sell signals in a separate MT4 trading window.
A blue bar is considered short-term bullish while a brown bar short-term bearish.
For good results, it’s important to use it in agreement with a trend trading technical indicator.
For instance, use in agreement with a 100 period simple moving average or a 50 period exponential moving average.
This will reduce the number of false signals significantly.
How to use it?
First, the trend trading indicator shows you the trend.
The trend is up when price is trading above the trend indicator.
Conversely, the trend is down when price is trading below the trend indicator.
Second, trade Chaos oscillator scalping signals in the direction of the trend.
- Trend up? Trade the blue bars. Ignore the brown bars
- Trend down? Trade the brown bars. Ignore the blue bars
The EUR/USD 1-Hour chart below displays the Chaos Oscillator Metatrader 4 Forex indicator in action.
Basic Trading Signals
Signals from the Chaos Oscillator MT4 forex indicator are easy to interpret and goes as follows:
Buy Signal: Open buy trade when the Chaos Oscillator bar color changes from brown to blue and the trend is upward.
Sell Signal: Open sell trade when the Chaos Oscillator bar color changes from blue to brown and the trend is downward.
Trade Exit: Use your own method of trade exit.
MT4 Indicator Characteristics
Currency pairs: Any
Platform: Metatrader 4
Type: Chart pattern indicator
Customization options: Variable (alert sound, send mail) Colors, width & Style.
Time frames: 1-Minute, 5-Minutes, 15-Minutes, 30-Minutes, 1-Hour, 4-Hours, 1-Day, 1-Week, 1-Month
Copy and paste the chaos-oscillator.mq4 into the MQL4 indicators folder of the Metatrader 4 trading platform.
You can access this folder from the top menu as follows:
File > Open Data Folder > MQL4 > Indicators (paste here)