The Colored Stochastic indicator for MT4

Colored Stochastic is a newly developed version of the Stochastic indicator, which is included in the standard forex set. Both versions of the indicator are very effective, but the updated version is more convenient in perception and more accurate in signals. Like the previous version, the new indicator is presented in the lower window of the price chart in the form of a line, but the Colored Stochastic line is painted in a certain color depending on whether the line is in the neutral zone, oversold or overbought zone, which makes the indicator much more convenient. Thus, the indicator can be used for various purposes, for example, to determine the current trend or finding the market in the overbought or oversold zone, as well as find the optimal moment to open positions.

The Colored Stochastic indicator can be used on any convenient time interval using any currency pairs.

Input parameters

In the settings of the Colored Stochastic indicator, there are fourteen input parameters that are responsible for the overall functioning of the indicator, namely the period of its values, the value of oversold or overbought levels, notification of signals, and much more. The remaining sections of the indicator are responsible for the color gamut and thickness of its values, as well as adding signal levels to the indicator window.

• KPeriod - period of the slow signal line Colored Stochastic. The default value is 14.

• Slowing - the period of slowing down the indicator values. The default value is 3.

• DPeriod - value of the period of the fast Stochastic signal line. The default value is 3.

• MAMethod - type of moving average smoothing used in indicator calculations. Default value is 2.

• PiceField - indicator price range. The default value is 0.

• overBought - overbought value parameter. The default value is 80.

• overSold - oversold zone parameter. The default value is 20.

• timeframe - parameter responsible for selecting the current timeframe. By default, it has the Current time frame value.

• showbars - parameter responsible for showing the indicator's bars. By default, it is set to false.

• showarrows - indicator parameter, which is responsible for the ability to draw arrows on the chart. The default value is false.

• alertsOn - parameter responsible for turning on notifications when an alert is received. The default value is false.

• alertsMessage - notification sent to the main window of the price chart in case of receiving a signal. The default value is true.

• alertsSound - parameter responsible for sound notification when a signal is received. The default is false.

• alertsEmail - parameter for sending a notification to the previously specified email in case of receiving an alert. The default value is false.

Indicator signals

The Colored Stochastic indicator is very simple and at the same time effective in use. Thanks to its advanced parameters, the indicator allows using it in a convenient way, for example, using the show arrows parameter, arrows of a certain color will be displayed on the chart, which can be considered a signal to open positions, or using show bars parameter, it can be displayed the indicator on the chart in the form of a histogram. Coloring the indicator line in a certain color can be considered as a market transition to the overbought or oversold zone. And the intersection of the signal and the main line of the indicator can be considered as a signal about the presence of a certain trend in the market. Thus, taking into account all the details of the indicator and their combination, a certain position can be opened.

Signal for Buy trades:

• The indicator line rises from level 20 and moves up, crossing its level 0, while not reaching the overbought zone, that is, level 80.

• The main line of the indicator must cross the signal line so that it is above the signal line.

After the line leaves the oversold zone and crosses the 0 level upwards, a long position may be opened, which should be confirmed by the indicator signal. It should be closed after the indicator line starts to reverse movement. At this moment, it should be considered opening new trades.

Signal for Sell trades:

• The indicator, crossing the level 80, starts moving down, falling below level 0, while being above the oversold zone, that is, level 20.

• The indicator lines intersect each other so that the signal line is higher than the main one.

If on a certain candle the line drops below level 0 and continues to move down, and at the same time the indicator sends a signal in the form selected in the settings, a sell trade can be opened. It should be closed when the indicator starts to move back, which will signal the possibility of opening new positions.

Conclusion

The Colored Stochastic indicator can easily be called universal for many reasons. For example, the ability to use it on any timeframe and any currency pairs, receive a convenient notification, the ability to change its visualization, the vastness of parameters in the indicator settings, and much more. To get the maximum profit from the indicator and obtaining certain trading skills, it is recommended to use a demo account.