The ATR Adaptive smooth Laguerre RSI indicator can be called a full-fledged trading strategy, as it consists of a number of interactions of effective indicators included in the standard forex set. Each indicator, namely ATR AS, Laguerre and RSI, plays an important role in the functioning of this trading system. Each from these indicators it generates its own signal, thereby confirming the signal of another, according to this principle, the ATR AS Laguerre RSI indicator works. The indicator is universal, as it can be used in different ways of trading, for example, to identify the current market trend, determining if the market is in the overbought zone or oversold, searching for the optimal moment to open positions, and so on. The indicator is presented in the lower window of the price chart in the form of a solid moving line that crosses its signal levels, while turning into a certain color.
The ATR AS Laguerre RSI indicator provides the ability to use it on any convenient timeframe, using any currency pairs.
Despite the fact that the ATR AS Laguerre RSI indicator can be considered a full-fledged strategy that includes other indicators, there are only five input parameters in its settings that affect the overall functioning of the indicator. There are also sections in the indicator settings that are responsible for the color scheme and thickness of its line, as well as adding additional signal levels to its window.
- Laguerre/ATR period - parameter responsible for the value of the periods of the Laguerre and ATR indicators. The default value is 32.
- Smooth period - period for smoothing the indicator values. The default value is 5.0.
- Price - the price to which the indicator's calculations will be applied. By default, it has the Close value.
- Level Up - parameter responsible for the value of the upper signal level of the indicator. The default value is 0.85.
- Level Down - value of the lower signal level of the indicator. The default value is 0.15.
In order to make trades using the ATR AS Laguerre RSI indicator, no special efforts are required, since it works according to the simplest principle. In order to open a position in the direction with the current trend, it is only needed to take into account the direction, color and location of the indicator line relative to its signal levels. And only after receiving a combination based on the conditions of using the indicator, a certain trade can be opened.
Signal for Buy trades:
- The line of the indicator starts to grow from the signal level of 0.15 and moves up to the level of 0.85. After that, it breaks through it and turns into a color with a growth value.
After receiving such conditions, a long position can be opened on a certain candle, due to the presence of an uptrend in the market. It should be closed after the indicator line turns into a different color, which indicates the possibility of starting another trend, which will allow opening new trades.
Signal for Sell trades:
- The indicator, after breaking through the level of 0.85 upwards, starts moving down to the level of 0.15, after breaking through which, the line is colored with the value of the fall.
After the indicator line crosses its level of 0.15 down, a short position may be opened, since the current market trend is down. Such a trade should be closed after receiving the opposite conditions from the indicator, for example, changing the color of the line, since at this moment a change in trend is possible and is given the opportunity to open new positions.
ATR AS Laguerre RSI is a versatile and fairly effective indicator that is more reminiscent of a trading strategy in its structure. When used correctly, the indicator shows excellent results in practice. Among other things, the indicator is extremely easy to use and this can be seen when practicing on a demo account.