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The Adaptive RSI of Adaptive EMA trading indicator is an algorithm based on the interaction of calculations of two Forex indicators included in its standard set. The indicator calculations are aimed at determining information about the current market trend, namely its strength and direction, which in turn also allows determining the moment of opening trades. It is represented in the lower window of the price chart as a solid line that changes its color and general direction during the period of determining the market trend. Thus, taking into account the current trend determined by the indicator, a certain trade can be opened.
The Adaptive RSI of Adaptive EMA indicator is suitable for use on any timeframe, with any currency pairs.
Input parameters
There are several sections in the indicator settings, each of which affects its general functioning. Thus, to change the values of technical work, the Input Parameters section is used, to change visualization elements, the Colors section is used, and the Levels section is used to add signal levels to the indicator window.
-RSI period - value of the period of the RSI indicator. The default value is 14.
-Price to use - the type of price to which the indicator's calculations are applied. By default, it is set to Close price.
-Price smoothing ema period - the period for calculating the price of the moving average of the indicator. The default value is 32.
Indicator signals
The Adaptive RSI of Adaptive EMA indicator is easy to use thanks to its easy-to-understand visualization. To open a certain trade, it should be determined the strength and direction of the current market trend. To do this, the color and direction of its line are taken into account. If the current trend is upward, buy trades are opened if the trend downward - sell trades. When the direction of the current trend changes, in both cases trades are closed.
Signal for Buy trades:
- The indicator line is colored with the growth value and goes from bottom to top.
Upon receipt of such conditions, a buy trade can be opened on a signal candle due to the presence of a strong uptrend in the current market. It should be closed during a trend change, namely when the direction and color of the indicator line changes. At this moment, it should be considered opening new trades.
Signal for Sell trades:
- The indicator line is moving down, while it is colored with the value of the fall.
A sell trade can be opened immediately upon receipt of a combination of such conditions on a signal candle. At this moment, a strong downtrend is determined in the market, if it changes, the current trade should be closed and a new one should be considered.
Conclusion
The Adaptive RSI of Adaptive EMA indicator is a very effective trading algorithm, the calculations of which are based on indicators, the accuracy of which has been proven by time. To improve the accuracy of signals, the indicator is recommended to be used with additional indicators, tools and expert advisors in various trading strategies.
