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The Coppock Forex Indicator is a technical indicator often used in trading to identify long-term buy and sell trades by measuring the weighted moving sum of two levels of change.
After the release of the updated version, the indicator has become less used, but still shows excellent results. The indicator can be used on any timeframe, both on the D and M intervals. It is used with any currency pairs.
Input parameters
The Coppock indicator is formed on the basis of only three parameters. Despite the small number of input parameters, the indicator performs a full-fledged job.
- -ROC 1Period - indicator of the rate of price change over a long period. The default value is 14.
- -Roc 2Period - indicator of the rate of price change over a short period. The default value is 11.
- -MAPeriod-period of the moving average on a certain time interval. The default value is 10.
In addition to the above parameters, you can change the width and color of the histogram in the indicator settings at the own discretion.
Indicator signals
As a rule, the Coppock indicator is a moving average, with a certain value, of the sum of the indicator for a certain period of time. The indicator signals depend on the change in the direction of the histogram columns, which determines the direction of the trend. If the bars are directed upwards, then the market is in an uptrend, respectively, if downwards, it is downtrend.
That is, if the histogram crosses level 0 from the bottom up, you should open buy trades. Close the trade when the direction of the histogram changes, that is, when level 0 crosses from top to bottom. A stop loss order is placed several points below the local extremum.
Sell trades are opened if the histogram crosses level 0 from top to bottom. If the histogram changes direction, that is, it crosses level 0 from bottom to top, the sell trade should be closed immediately. A protective stop loss should be set a few points above the local extremum.
At the same time, it should be borne in mind that it should not be opened trades if the histogram columns are much smaller than the other columns. Do not forget about the presence of divergence. That is, if the market detects signals against the current trend. In this case, trades cannot be opened, and the previous ones should be closed.
Conclusion
The Coppock technical indicator is an excellent assistant in determining the trend. Thanks to the use of the indicator, it can be gotten fast and long-term signals for making trades. And if the Coppock is used with additional indicators, a profitable trade will be guaranteed. However, do not forget about proper money management and about using a demo account to the full mastering the indicator.
