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The Smoothed Stochastic Inverse Fisher Transform trading indicator, which can also be called SSIFT, is a trading algorithm whose calculations are based on using a combination of several forex trading indicators. This indicator can be used to determine the current trend, namely its direction and strength, which in turn are taken into account when opening a certain trade. SSIFT is presented in the lower window of the price chart as two intersecting lines: RBW and IFT, taking into account the direction and intersection of which the current trend is determined, and at the same time a trade is opened.
The SSIFT indicator is suitable for trading any currency pair, on any timeframe.
Input parameters
The SSIFT indicator includes in its settings several sections that affect its general functioning. The Input parameters section is responsible for its technical operation, while the Colors section is used to change its visualization, including the color scheme, to add signal levels to its window, the Levels section is used.
-Period - indicator period value. The default value is 30.
-Smoothing - parameter responsible for slowing down the current calculations. The default value is 15.
-Applied price - a type of price to which indicator calculations are applied. Close price by default.
Indicator signals
Despite the presence and number of calculations performed, the SSIFT indicator is very easy to use. Thus, to determine the current trend, one should take into account the values of the indicator, namely the intersection and the general direction of its lines. And, accordingly, if the current market trend is upward, buy trades are opened, and during a downward trend, sell trades are opened. When the trend direction changes, trades are closed.
Signal for Buy trades:
- Indicator lines move from bottom to top, while the IFT line is above the RBW line.
Upon receipt of such a condition, a long position can be opened on the signal candle, due to the presence of an upward trend in the current market. Upon receipt of a reverse signal, namely at the next intersection of the lines, the trade should be closed. At this moment, a change in the current trend is possible, which in turn will allow considering the opening of a new trades.
Signal for Sell trades:
- Indicator lines move down and cross so that the RBW line is above the IFT line.
Upon receipt of a combination of such conditions that characterize the presence of a downward trend in the market, a sell trade can be opened. It should be closed when the direction of the current trend changes, namely at the next intersection of the indicator lines. At this moment, new trades should be opened.
Conclusion
The Smoothed Stochastic Inverse Fisher Transform indicator is a very smart trading algorithm, the calculations of which consist of the operation of several effective forex indicators. The indicator is very simple, but at the same time it allows for determining the direction of the current trend and therefore it is suitable even for beginners. At the same time, before trading on a real deposit, practice on a demo account is recommended.
