The RSI Stochastic Signals Oscillator MT4 forex indicator is based on Stochastic and RSI.
The indicator oscillates between 0 and 105 reading in a sub window below the main MT4 chart.
A reading of 30 and below is considered to be oversold while a reading of 70 and above is considered to be overbought.
Two lines are plotted in the sub window, a blue and a red one.
When the blue oscillator line crosses the red oscillator line from below, this is a bullish trading signal.
When the blue oscillator line crosses the red oscillator line from above, this is a bearish trading signal.
In order to make it easier for traders, the RSI Stochastic Signals Oscillator MT4 draws all crossover signals directly on the main chart.
A green rounded arrow for a bullish crossover and a red rounded arrow for a bearish crossover.
For more reliable trading signals, use this indicator together with a trend following technical indicator and only trade in the direction of the overall trend.
Price in an up trend? Only trade the green rounded arrows near the 0-30 level.
Price in an down trend? Only trade the red rounded arrows near the 70-100 level.
The EUR/USD M5 chart below displays the RSI Stochastic Signals Oscillator forex indicator in action.
Basic Trading Signals
Signals from the RSI Stochastic Signals Oscillator forex indicator are easy to interpret and goes as follows:
Buy Signal: Go long when the RSI Stochastic Signals Oscillator paints a green rounded arrow and indicator readings are trading between 0 and 30 (bullish + oversold).
Sell Signal: Go short when the RSI Stochastic Signals Oscillator paints a red rounded arrow and indicator readings are trading between 70 and 100 (bearish + overbought).
Trade Exit: Close the open trade 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
Customization options: Variable (PeriodRSI, PeriodStoch, PeriodSK, PeriodSD, SmoothPeriod, SmoothPhase, SmoothDouble) 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 dtosc-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)