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The DPO Histo is a trading indicator that was developed based on the moving average to determine the current market trend and its strength, this allows opening certain trades in its direction. The indicator is displayed in the lower window of the price chart in the form of a histogram with a signal line, which, upon receipt of a certain combination of conditions, is painted in one of two colors and is located above or below its signal level 0, using these indications, the current market trend is determined, and after that, the trade in his direction.
The DPO Histo indicator is suitable for use on any timeframes, with any currency pairs, working equally effectively with any values.
Input parameters
The DPO Histo indicator in its settings has only two input parameters, however, this does not affect the efficiency or complexity of the indicator adaptation in any way. The Colors and Levels sections are responsible for changing the color gamut of the indicator and adding additional signal levels to its window.
- x_prd - parameter responsible for the indicator calculation period. The default value is 14.
- average Mode - type of moving average smoothing used in indicator calculations. Default is Simple.
Indicator signals
To use the DPO Histo indicator as an assistant in determining the current trend, its strength, and then finding the optimal moment to enter the market does not require much effort or skill. To do this, it just needed to wait for a certain combination of conditions based on color, the location of the histogram relative to level 0 and its signal line. And if an uptrend is detected, buy trades are opened, and if the trend is down, sell trades.
Signal for Buy trades:
- The histogram of the indicator, together with the signal line, rises above level 0 and is colored in color with the growth value.
When such conditions are formed, a buy trade can be opened on a signal candle. Such a trade should be closed after the opposite conditions are received, namely, a change in the color and location of the indicator relative to the signal level. At this moment, the current upward movement changes, and one should consider the possibility of opening new trades.
Signal for Sell trades:
- The histogram of the indicator, colored with a falling value, along with its signal line, falls below the 0 level.
A sell trade can be opened on a signal candle after receiving such conditions due to the presence of a downtrend. The trade should be closed upon receiving the opposite conditions from the indicator. This will indicate a change in the current trend, which will allow considering the opening of new trades.
Conclusion
The DPO Histo indicator is a very logical and efficient trading algorithm that can be an excellent assistant in determining market movements. Although its use does not require much effort or special skills, it is recommended to use a demo account first, which will improve the accuracy and quality of trading.
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