The DPO histogram buy and sell technical oscillator delivers short-term dual colored trading signals that can be used for scalping and day trading purposes.
The DPO fluctuates above and below its zero level.
- DPO oscillator values above the zero level suggests the short-term trend is up.
- DPO oscillator values below the zero level suggests the short-term trend is down.
The DPO oscillator paints blue colored bars above the zero line when the short-term trend is up and red bars below the zero line when the short-term trend is down.
The DPO indicator should be traded together with a longer-term trend following indicator.
For instance, use it together with the 200 period exponential moving average, 200 period simple moving average, Bollinger Bands,…
- Underlying trend up? Trade the blue DPO oscillator bars and ignore the red bars.
- Underlying trend down? Trade the red DPO oscillator bars and ignore the blue bars.
Feel free to experiment with the different indicator’s inputs settings to suit your needs and preferences.
The EUR/USD 5-Minute chart below displays the DPO Buy/Sell Histogram Metatrader 4 forex indicator in action.
Basic Trading Signals
Signals from the DPO Buy/Sell Histogram MT4 forex indicator are easy to interpret and goes as follows:
Buy Signal: Buy the currency pair when the DPO oscillator bars changes color from red to blue. The short-term trend is up.
Place a stop loss below support or use your own preferred SL method.
Sell Signal: Sell the currency pair when the DPO oscillator bars changes color from blue to red. The short-term trend is down.
Place a stop loss above resistance or use your own preferred SL method.
MT4 Indicator Characteristics
Currency pairs: Any
Platform: Metatrader 4
Type: chart window indicator
Customization options: Variable (X period, average mode) Width & Style.
Time frames: 1-Minute, 5-Minutes, 15-Minutes, 30-Minutes, 1-Hour, 4-Hours, Daily, Weekly, Monthly
Copy and paste the dpo-histogram-indicator.ex4 indicator 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)