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The Stochastic of alb Average indicator is a trading algorithm based on a modification of a standard forex indicator using a moving average that smoothes its calculations. The general calculations of the indicator are aimed at determining the presence of a trend in the market, namely its current direction and strength. This, in turn, is taken into account when opening a certain trade. At the same time, when setting certain signal levels, the indicator can be used to determine whether the market is in the overbought or oversold zone. The indicator is presented in the lower window of the price chart as a solid line that changes its color and direction depending on current market conditions.Taking into account the values of the indicator, the current trend is determined, taking into account which a trade is opened.
The Stochastic of alb Average indicator is suitable for trading on any time frame using any currency pairs.
Input parameters
There are several sections in the settings of the Stochastic of alb Average indicator that are responsible for its general functioning. The Input parameters section is responsible for its technical work, the Colors section is for its visualization, and the Levels section is used to add signal levels to the indicator window.
-Stochastic period - period of calculation of the Stochastic indicator. The default value is 14.
-Stochastic slowing/smoothing period - smoothing period for calculations of the Stochastic indicator. The default value is 3.
-Average alb swing count - indicator calculation swing. The default value is 5.
-Average alb speed - the speed of the average value of the indicator. The default value is 1.0.
-Average method - type of smoothing of the indicator values. By default, it is set to Simple moving average.
-Price - type of the price to which the indicator calculations are applied. By default, it has the Close price value.
Indicator signals
The Stochastic of alb Average indicator is easy to use due to its visualization. To open a certain trade, one should take into account the presence of a trend in the market, as well as its current direction and strength. For this, in turn, one should take into account the color and direction of its line. If the indicator determines an upward trend, long positions are opened, if the trend is downward, short positions are opened. When the trend changes, in both cases, trades are closed.
Signal for Buy trades:
- The indicator line has a color with a growth value and is directed upwards.
Upon receipt of such conditions, a buy trade can be opened on the signal candle due to the presence of an uptrend. When the current trend changes, namely, upon receipt of reverse conditions from the indicator, the current trade should be closed and opening new ones should be considered.
Signal for Sell trades:
- The indicator line is directed from top to bottom and is colored with the fall value.
A sell trade due to the presence of a downtrend can be opened immediately upon receipt of such conditions on a signal candle. When receiving reverse conditions from the indicator, the trade should be closed. At this moment, a change in the current trend is possible, which will allow considering the opening of new trades.
Conclusion
The Stochastic of alb Average indicator is a very accurate trading algorithm since its calculations are based on a modification of a standard forex indicator, the effectiveness of which has been proven over time. Practice on a demo account is recommended before using the indicator on a real deposit.
