Indicators like the Relative Strength Index or RSI may actually continue to show overbought or oversold conditions, even when the market already adjusted itself.
The Relative Price Channel Metatrader 5 forex indicator uses the RSI in constructing high and low neutral regions using a simple EMA lag.
In addition, the Relative price channel Metatrader 5 forex indicator can be deployed for spotting possible trend reversal conditions when the RSI crosses the top bands (overbought condition) or lowest bands (oversold condition).
The EUR/USD H1 chart below displays the Relative Price Channel Metatrader 5 forex indicator in action.
Basic Trading Signals
Buy Signal: Go long when the silver line of the Relative price channel Metatrader 5 forex indicator breaks and hovers above the zero signal level.
Sell Signal: Go short when silver line of the Relative price channel Metatrader 5 forex indicator breaks and hovers below the zero signal level.
Exit buy trade: Close all buy orders if while a bullish trend is ongoing, the silver line of the Relative price channel indicator breaks above the uppermost outer pale green band or breaks below the zero center level.
Exit sell trade: Close all sell orders if while a bearish trend is ongoing, the silver line of the Relative price channel indicator breaks below the lowest outer linen band or break above the zero center line.
Tips: Trading the Relative price channel indicator alongside other technical tools i.e. trend and momentum indicators will offer improved trading results for both short-term traders and swing traders.
MT5 Indicator Characteristics
Currency pairs: Any
Platform: Metatrader 5
Type: chart window indicator
Customization options: Variable (RSI period, RSI price, Smoothing period for RSI, Overbought level %, Oversold level %, Upper neutral level %, Lower neutral level %), 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 Relative Price Channel.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)