RSI Candles Indicator For MT4

RSI Candles Indicator For MT4

Table Of Contents:

  1. RSI Candles Indicator For MT4
  2. Trading ideas with the RSI Candles Indicator For MT4
  3. Interpreting the RSI Candles Indicator For MT4
  4. RSI Candles Indicator For MT4 - Buy Entries
  5. RSI Candles Indicator For MT4 - Sell Entries
  6. RSI Candles Indicator For MT4 - Conclusion

The RSI Candles Indicator For MT4 is a revised indicator that uses the four RSI parameters namely the High, Low, Open and close to depict the classic Relative Strength Index indicator in the form of candlesticks. Candlesticks is the most easy prominent method for interpreting price action to identify patterns now this same skill set can be used to analyse the Relative Strength Index candles in conjunction with price action itself. This opens up a world of new opportunities to your trading and how you analyse the Relative Strength Index to identify profitable trend reversals or trend continuation trading opportunities.

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Trading ideas with the RSI Candles Indicator For MT4


To start with, immediately you load the indicator on your trading chart, you should go to the setting and reset to be able to view all the candlesticks including the lower black candlestick.

When you load it the first time, the black candlesticks at the bottom are not visible since they appear as a black cloud since the lines are set to be very thick meaning they appear as a continuous black cloud.

When loaded the first time, it looks like the screenshot below:



To reset the setting, double click anywhere on the indicators candlestick. And after resetting, you can set the width of the candlestick lines to your desired width. However, you should be careful to avoid setting the width to too thick.



Before resetting the colour setting



After resetting the colour setting


Interpreting the RSI Candles Indicator For MT4



Just as the name suggests, the RSI Candles Indicator For MT4 is a version of the Relative Strength Index indicator that uses candlesticks instead of an oscillating indicator line. Therefore, it indicates the trend and momentum in the market.

If you look closely on the indicator candlesticks, you shall realize that the shape attained by the colours part of the candlestick makes an oscillatory shape similar to if the standard RSI indicator line was to be plotted.

The black section of the indicator candlesticks acts as the support for the coloured sections. The longer the black section the higher the coloured sections are and vice versa.

The coloured section is either maroon or blue depending on the trend the RSI Candles Indicator For MT4 is indicating. When the coloured section is blue, it shows that there is a bullish trend in the market. On the other hand, if the coloured section is maroon, it shows that there is a bearish trend in the market.



If you are using a long term trading strategy, you should use a higher period. Increasing the value of the indicator’s period means that the indicator will be using more candlesticks in its calculations and thus filter the short term trends.

To determine the momentum of the market, you should look at the length of the coloured section. The longer the coloured section (blue or maroon sections), the higher the momentum of the trend. That means, if the indicator candlesticks are blue and getting longer with time, the bullish trend is getting stronger.

On the other hand, if the indicator candlesticks are maroon and getting longer with time, the bearish trend is getting stronger.

The only disadvantage of this indicator over the standard RSI indicator is that it does not have overbought and oversold levels like the standard RSI indicator.

To determine if the market has entered the oversold or overbought levels, you should combine this indicator with an indicator like the standard RSI that shows the oversold and overbought levels.


RSI Candles Indicator For MT4 - Buy Entries


To place a BUY, you should wait for two blue candlesticks to form. You should place your BUY order at the beginning of the formation of the third blue indicator candlestick.

However, you should also look at the trend of the length of the blue section. If the height of the previous blue section was higher than the current, avoid placing any BUY order since it shows that the bullish trend is reducing.

If possible, you should also use an indicator that can show if the market has entered into the overbought condition to avoid placing a BUY when the market is just about to turn bearish.

The BUY order should be closed when the first maroon indicator candlestick appears.


RSI Candles Indicator For MT4 - Sell Entries


To place a SELL, you should wait for two maroon candlesticks to form. You should place your SELL order at the beginning of the formation of the third maroon indicator candlestick.

However, you should also look at the trend of the length of the maroon section. If the height of the previous maroon section was lower than the current, avoid placing any SELL order since it shows that the bearish trend is reducing.

If possible, you should also use an indicator that can show if the market has entered into the oversold condition to avoid placing a BUY when the market is just about to turn bullish.

The SELL order should be closed when the first blue indicator candlestick appears.




RSI Candles Indicator For MT4 - Conclusion


The RSI Candles Indicator For MT4 may prove to be complicated especially for Forex beginners. However, by following this guide, you should be able to correctly use it without a glitch.

And in case you find yourself struggling to identify the specific market trend, you could use a trend indicator to determine the specific market trends.

Most importantly, you should combine this indicator with an indicator that shows the overbought and oversold conditions to determine when not to trade. You should avoid trading when the market enters either the oversold or overbought conditions since once these conditions are attained, the market prepares for a reversal or a pullback.

 

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