The Double Smoothed Stochastic is a momentum Metatrader 5 forex indicator that compares the closing price of a currency pair to the range of its prices over a specified period of time.
Reducing the value of the stochastic period (a variable within the inputs parameter), reduces the sensitivity of the oscillator.
The general idea behind the Double Smoothed Stochastic forex indicator is that in an upward trending market, price tends to close near the peak, likewise, in a downward trending market, price closes near the low.
Furthermore, the indicator identifies overbought and oversold levels, because it is range bound.
The range is from -1 to 101, and stays constant irrespective of how fast or slow a currency pair advances or declines.
The GBP/USD M30 chart below displays the Double Smoothed Stochastic Metatrader 5 forex indicator in action.
Basic Trading Signals
Buy Signal: Go long after the dim gray line of the Double Smoothed Stochastic Metatrader 5 forex indicator breaks above the 20 level (after forming an orange area below the 20 region).
Sell Signal: Go short after the dim gray line of the Double Smoothed Stochastic Metatrader 5 forex indicator breaks below the 80 level (after forming a lime green area above the 80 level).
Exit buy trade: Close all buy orders if while a bullish trend is ongoing, the dim gray line of the Double Smoothed Stochastic MT5 fx indicator breaks above the 80 level.
Exit sell trade: Close all sell orders if while a bearish trend is ongoing, the dim gray line of the Double Smoothed Stochastic MT5 fx indicator dips below the 20 mark.
Tips: The Double Smoothed Stochastic Metatrader 5 forex indicator is an ideal technical tool for trading non-trending markets.
MT5 Indicator Characteristics
Currency pairs: Any
Platform: Metatrader 5
Type: chart window indicator
Customization options: Variable (Stochastic period, Smoothing period, Smoothing period, Price to use for high, Price to use for low, Price to use for close, Overbought level, Oversold level), Colors, width & Style.
Time frames: 1-Minute, 5-Minutes, 15-Minutes, 30-Minutes, 1-Hour, 4-Hours, 1-Day, 1-Week, 1-Month
Type: oscillator | momentum
Copy and paste the double_smoothed_stochastic_1_1t17.ex5 indicator into the MQL5 indicators folder of the Metatrader 5 trading platform.
You can access this folder from the top menu as follows:
File > Open Data Folder > MQL5 > Indicators (paste here)