The Klinger Oscillator KVO Indicator For MT4
The Klinger Oscillator KVO Indicator For MT4 is a powerful indicator for trading. It not only helps you to enter established trends, but also warns you of a possible trend change, which can then also be traded. The indicator tries to determine the long-term direction of the money flow while still being sensitive enough to detect short-term movements. This is done by comparing the volume with the price movement. The indicator then plots the results as an easy to interpret oscillator.
In this article I will explain the Klinger Oscillator KVO Indicator For MT4 and show you how powerful it is. Afterwards I will also show you some trade examples with this indicator so you can see the power.
Explanation of the Klinger Oscillator KVO Indicator For MT4
As I shortly wrote above, the Klinger Oscillator KVO Indicator For MT4 uses Volume to determine its histogram. This is calculated like follows: First the Volume Force of the instrument is determined. The Volume Force is a form of volume calculation, which also takes the current trend into consideration and thus generates a more accurate value that also shows the direction of the volume. Second the indicator calculates its oscillator with essentially is generated by subtracting an exponential moving average of the Volume Force with the period 55 from the same EMA but with the period 34. The results are then plotted in form of a histogram.
The indicator also displays a signal line, which essentially is an exponential moving average with period 13. The relationship between this line and the histogram can be used to find trade entries. A buy signal is for example created when the histogram is above zero and then also moves above the signal line. For sell signals it is the opposite.
Another method of trading with the Klinger Oscillator KVO Indicator For MT4 is divergence based signals. Divergence is a great method to spot potential reversals in the market. Simply said, it shows the diminishing force of a trend. A bearish divergence is created when price makes higher highs, but the Klinger histogram draws lower highs. A bullish divergence is formed the opposite way, meaning price creates lower lows while the histogram shows higher lows.
Trade examples with the Klinger Oscillator KVO Indicator For MT4
Above you can see some trade examples that use the Klinger Oscillator KVO Indicator For MT4. I marked both the divergence trades and the signal line trades. For more safety you should focus on the setups that combine divergence and the signal line setups as they provide a higher win-percentage. From these few examples you can already see how much power this indicator possesses. Depending on you stop loss placement, all the trades could have been winning trades.
The trades where taken with the following procedure. First we wait for a divergence to be created. Once this step is done, we can now focus on finding an entry with the divergence, meaning short with bearish divergence and long with bullish divergence. For our entry we use the signal line. Because we have the confluence of the divergence, it is enough to wait for the histogram to cross underneath the signal line and there is no need to wait for both to switch to the other side of the indicator.
It is important to note, that the Klinger Oscillator KVO Indicator For MT4 works best when used in a trending market, because there might be a lot of fake signals in a ranging market that can lead to losses. You also shouldn’t get too greedy with your targets. Greed is never good while trading and has ruined many trader’s capital. Patience is the key to success in trading.