The extreme colored Stochastic indicator for MT4 is an improved version of the traditional Stochastic technical indicator.
This version gives you a lot of options that can be accessed from the inputs tab.
For instance, the overbought and oversold values can be changed (default, 20 and 80).
The indicator will start drawing a green line when the Stochastic indicator reaches the oversold area.
Likewise, the indicator will start drawing a red line when the Stochastic indicator reaches the oversold area.
The Stochastic indicator should be traded in agreement with the underlying trend for good results.
Combine with a trend-following indicator such as an exponential moving average, simple moving average, Bollinger Bands or ADMI.
Underlying trend up? Trade the oversold green Stochastic signals.
Underlying trend down? Trade the overbought red Stochastic signals.
Feel free to experiment with the different indicator’s inputs settings to suit your needs and preferences.
The GBP/USD 1-Minute chart below displays the Extreme Colored Stochastic Metatrader 4 forex indicator in action.
Basic Trading Signals
Signals from the Extreme Colored Stochastic MT4 forex indicator are easy to interpret and goes as follows:
Buy Signal: Open a buy trade when the Stochastic indicator turns back above the 20 value from below (oversold area). The underlying trend should be pointing upward.
Place a stop loss below support or use your own preferred SL method.
Sell Signal: Open a sell trade when the Stochastic indicator turns back below the 80 value from above (overbought area). The underlying trend should be pointing downward.
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 (K period, slowing, D period, MA method, overbought, oversold, time frame, show arrows, show bars, alerts on, alerts email) Width & Style.
Time frames: 1-Minute, 5-Minutes, 15-Minutes, 30-Minutes, 1-Hour, 4-Hours, Daily, Weekly, Monthly
Copy and paste the colored-stochastic-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)