The Dynamo Stochastic Metatrader 4 forex indicator is based on the highly popular Slow Stochastic trading indicator.
Similar to the default version, the Dynamo Stochastic indicator floats between two extreme levels, 0 and 100.
The 0 level is considered oversold while the 100 level overbought.
- Look for buy trade opportunities when the oscillator reaches the 0 oversold level
- Look for sell trade opportunities when the oscillator reaches the 100 overbought level
The Dynamo Stochastic oscillator needs to be combined with a trend following indicator because it won’t yield great trading performance during trending markets.
For instance, use in agreement with EMA, Bollinger Bands or SMA.
Trade in the direction of the overall trend as indicated by the trend following indicator. Ignore signals against the overall trend.
Trend up? Trade oversold oscillator signals around the 0 level.
Trend down? Trade overbought oscillator signals around the 100 level.
The default Dynamo Stochastic indicator period settings are set to 5, 3, 3. They can be fully modified directly from the indicator’s MT4 inputs tab.
The EUR/USD 1-Hour chart below displays the Dynamo Stochastic Oscillator Metatrader 4 Forex indicator in action.
Basic Trading Signals
Signals from the Dynamo Stochastic Oscillator MT4 forex indicator are easy to interpret and goes as follows:
Buy Signal: Open long trade position when the Dynamo Stochastic indicator falls back towards the 0 level (oversold) and the overall trend is upward.
Sell Signal: Open short trade position when the Dynamo Stochastic indicator rises back towards the 100 level (overbought) and the overall 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 (Kperiod, Dperiod, Slowing) 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 dynamo-stochastic.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)