Vidya Indicator For MT5
Table Of Contents:
- Vidya Indicator For MT5
- Trading ideas with the Vidya Indicator For MT5
- Vidya Indicator For MT5 - Buy Entries
- Vidya Indicator For MT5 - Sell Entries
- Vidya Indicator For MT5 - Conclusion
The Vidya Indicator For MT5 is also called the Variable Index Dynamic Average indicator which was developed by Tushar Chande. It calcualtes the values similar to the EMA (Exponential Moving Average) but with dynamically changing period. The period gets adapted according to the volatility of the price moves. This makes it more responsive than many other moving average calculation methods.
The Vidya Indicator For MT5 is also known as the Variable Index Dynamic Average indicator. The indicator was developed by Tushar Chande. He used the Chande Momentum oscillator formula along with the exponential moving average to create the dynamic Vidya indicator.
One of the key reasons for which this indicator works like a charm lies within its backend coding. It analyzes the highs and lows, and sync with the EMA and CMO ( change momentum oscillator). The resulting curve creates a color-changing bold moving average which tells us about the stage of the trend.
The long term traders often use it to identify the perfect trend at the most complex time. Though the indicator is a powerful tool to analyze the important market metrics, traders are requested to open the trade after knowing the synchronization process. The Vidya indicator needs to work with an existing trading method which has a win rate of over 70%.
If you depend on the indicator reading only, you are not going to get the desired result. The reading from the Vidya should be taken only to filter the key direction of the trend.
Trading ideas with the Vidya Indicator For MT5
You might be thinking about the type of trading method which will work best with the Vidya indicator. As the VIdya indicator uses the EMA and CMO formula, it is important to get the data from the HTF. By choosing a higher time frame, you give enough data feed to the Vidya indicator which improves the accuracy of the trade setup.
Incorporating this indicator with a price action trading strategy seems to be the most logical way to improve accuracy. But some of you might have a hybrid trading model that focuses on the PA and other important factors. For them, the indicator can still work like a charm. But they have to learn its use properly by using it in the demo platform.
When they will take the trade in the demo environment, they will be able to boost up the profit factor and change things in a fast-paced manner. But all these things need to be done in an organized way. For the ease of the trader, we are going to teach how to use the Vidya to take the long and short trade in any time frame.
Vidya Indicator For MT5 - Buy Entries
The traders depend on the system to find support and resistance. With the help of the existing trading system, the traders will find the potential buying zone. The support level must be drawn in the daily or hourly chart. In case, you draw the support level in the minute chart, you must know the price action trading system.
After finding the support zone, you have to wait for the price to drop at the support. A strong support level should create strong bullish momentum which usually results in a bullish pin bar or price action signal. The support level will also match with the Vidya indicator moving average.
The moving average will be bold and it has color changing property. When the rejection takes place, the signal line in the Vidya will be green in color and it will show a steady movement in the north direction. Open your long trade with less risk so that you can withstand the losses. Never expect this indicator will make you a rich trader over the night. It will just increase your win rate and boost the confidence level.
Vidya Indicator For MT5 - Sell Entries
The smart investors must have guessed how the Vidya indicator finds the important selling zone. To sell an instrument, you have to mark the resistance zone first. A resistance zone should be formed with the combination of important highs or lows or both. Once you get the desired resistance, it’s time to look for the potential bearish trade setup.
With your current trading model, find the key selling point in the chart. The sell setup should be formed in favor of the trend. In case, you intend to open trade against the trend, it is better to look for the bearish PA signal. If possible evaluate the news data as it can improve your profit potential significantly.
After finding the desired sell trade setup, you should see the price rejection is taking place right at the Vidya signal line. The signal line should be colored in purple and the slope will be negative. This means the signal line will head towards the south point and create a strong selling momentum.
Before you take the final step, analyze the TP and SL levels. These level needs to be adjusted based on the risk to reward ratio. Regarding the risk profile, you can risk 2% in the trend trading method but for the reversal trading strategy, you have to risk only 1% of the balance. By keeping a low-risk profile, you can get the best from the Vidya indicator.
Vidya Indicator For MT5 - Conclusion
The Vidya indicator is a powerful trend analyzing tool. People who have a higher time frame trading method can use the Vidya signal line as dynamic support and resistance. But taking the decision based on the data of the Vidya signal line can increase your risk factor.
To avoid this, the professionals always ask the retail investors to consider the indicator as a trader filter tool only. Just like the experts, you have to find the signal with your existing trading model. After getting your desired trade setup, it's time to move on to the Vidya signal line. The signal line should tell you about the bearish and selling momentum.
It might take a while to get used to the adaptive signal line. But you do have a huge advantage as you can filter the potential trade signals based on the color of the Vidya signal line. This will improve your trade execution process to a great extent and make you a better trader. But never ignore the news data in the trading process as it can create extreme stress in the business. To keep things organized, you must integrate Vidya as a filter tool. And expect few losing trades once in a while as no one can predict the market.