DayImpuls_T3_v2 Indicator For MT4

DayImpuls_T3_v2 Indicator For MT4

Table Of Contents:

  1. DayImpuls_T3_v2 Indicator For MT4
  2. Trading ideas with the DayImpuls_T3_v2 Indicator For MT4
  3. DayImpuls_T3_v2 Indicator For MT4 - Divergence Analysis
  4. DayImpuls_T3_v2 Indicator For MT4 - A Deeper Look
  5. DayImpuls_T3_v2 Indicator For MT4 - Conclusion

The DayImpuls_T3_v2 Indicator For MT4 combines the DayImpuls indicator and a T3 Moving Average to create a momentum oscillator. A bullish market is characterized by an oscillator that is placed above the 0 mark, while a bearish market is marked by the oscillator hovering below 0.

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Trading ideas with the DayImpuls_T3_v2 Indicator For MT4


One of the two uses of this indicator is to put us in a position where we are able to spot the type of momentum that is currently taking place in the market. In the image below I have attached a screenshot showing you how to spot dominant bullish momentum with the help of the indicator.



With reference to the above screenshot you can see the market went through a strong uptrend as shown by the price action and the uptrend support line. The dominant bullish momentum can be easily deduced without even looking at the price action. Looking at the indicator - you have a zero line going through the indicator window. When the momentum oscillators are mostly above this zero-line then the market is considered to be bullish.

That is all you need to know when it comes to identifying bullish or dominant bullish momentum. Up next we have an example that sees us follow the same protocol to identify dominant bearish moment as shown in the image below.



So as you can see the market went through a strong downtrend as shown by the price action and also the downtrend resistance lines drawn in. The dominant bearish momentum can easily be seen without checking the price action. By simply looking at the indicator alone you have a zero line going through the indicator window. So when the momentum oscillators or lines are mostly below the zero line then the market is considered to be bearish.

When you have the capabilities of accurately identifying the dominant momentum pressure that is happening in the market you can then proceed on to identify key trading opportunities that coincide with the underlying momentum of the market. So if the directional momentum is clearly bullish then you should prioritize bullish trade setups and also similarly when the market is showing you dominant bearish momentum then you ought to prioritize those sell trading opportunities.

However, it does not end there because to a certain degree you are also able to pick out trend exhaustion in the market, and on the basis of that alone, you can formulate trading ideas to set yourself up for reversal trading opportunities in the market. However, as pointed out earlier it is best to just prioritize trading opportunities that correlate with the dominant momentum that is currently happening in the market especially when you are in an up or downtrend that is yet to reach its full maturity level. Meaning that there is still some juice left in a trend to go on trading for a longer period of time.


DayImpuls_T3_v2 Indicator For MT4 - Divergence Analysis


Thanks to the versatility of this indicator, it is not limited to only you having the ability to spot out dominant momentum in any given period of time. You can also use it as a reliable resource to identify regular divergence structures as shown in the image below.



Making reference to the image above, you can see that the price action is making higher highs whilst the indicator is plotting lower highs. This is a classic display of regular bearish divergence. This gives us some leading indication that the market is most likely to reverse and sell-off which will help make regular divergence trading more accurate. Therefore you can also see in the next text box the price sold off as anticipated by the bearish regular diversion structure.


DayImpuls_T3_v2 Indicator For MT4 - A Deeper Look


Up next we take a deeper look into regular divergence patterns as shown in the image below.



One thing you need to understand is that most trading patterns need to be viewed as a means of tracking market maker movement. With regular divergence that is also the case. We can view it as a big stop hunt before the market officially turns around and reverses to form a new trend. As you can see after the starting point of the divergence pattern the oscillator started making lower highs whilst the price action was making higher highs.

This means exhaustion in terms of the underlying uptrend but it also means that the market makers are going through a big stop hunter to collect some orders before it officially sells off which was the case in the latter part of the screenshot referenced above.

However, you need to know that some regular divergence patterns can be quite long in terms of length - taking up a considerable amount of time and that is simply because the market makers are still evaluating their positions relative to the number of orders accumulated. The whole aim is for you to understand and read the underlying movements that are being portrayed to you in the form of regular divergence structures.


DayImpuls_T3_v2 Indicator For MT4 - Conclusion


Beginner traders and even some average traders struggle sometimes to determine what is the dominant form of momentum taking place. Dominant momentum is directional momentum where you can analyze and conclude that the underlying momentum or pressure is net bullish or net bearish. This core aspect of technical analysis establishes a strong foundation in your forecasts and trading ideas.

It was shown how this indicator can be used to do so both effectively and easily by just evaluating the main oscillators of the indicator relative to its zero-line. Therefore, there is not much profit in undermining the importance of identifying the main momentum and respective direction. Because if you are able to quickly determine what the dominant momentum is then your trading ideas will be built on top of that in a way that yields success more often than not.

However, its use-case does not end there because it was illustrated that this indicator can also be used to accurately identify and trade regular divergence price and indicator structures. A deeper look was also taken into this pattern to give traders and analysts a better perspective and understanding of what is truly happening behind the scenes when a regular divergence pattern is in full swing.

 

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