The Dynamic Zone RSI Meatatrader 4 forex indicator combines RSI and two floating bands in a separate MT4 window.
The bands act as support and resistance. The purple band acts as resistance while the orange band acts as support.
The RSI itself oscillates between the two bands and sometimes crosses the bands.
This creates buy and sell RSI trading signals:
A buy signal occurs when RSI falls below the orange support band and crosses back above.
A sell signal occurs when RSI rises above the purple resistance band and crosses back below.
Use this indicator together with a trend following indicator for more reliable trading signals.
Take signals from the Dynamic Zone RSI in the direction of the underlying trend.
Only trade buy signals when the trend is up, ignore its sell signals.
Conversely, only trade sell signals when the trend is down, ignore its buy signals.
The Dynamic Zone RSI indicator uses 5 and 30 default setting for the RSI and Bands respectively.
Both values can be changed from the indicator’s inputs tab.
The EUR/USD Hourly chart below displays the Dynamic Zone RSI Forex Metatrader 4 indicator in action.
Basic Trading Signals
Signals from the Dynamic Zone RSI MT4 forex indicator are easy to interpret and goes as follows:
Buy Signal: Open buy trade when the indicator crosses below the orange support band and the rises back above.
Sell Signal: Open sell trade when the indicator crosses above the purple resistance band and the falls back above.
Trade Exit: Close the open buy/sell forex position when an opposite signal occurs, or use your own method of trade exit.
MT4 Indicator Characteristics
Currency pairs: Any
Platform: Metatrader 4
Type: Chart pattern indicator
Customization options: Variable (RSI Period, Band Period) 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 dynamic-zone-rsi.mq4 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)