Extremum Indicator is known as a trend-following forex trading tool among the active market participants. This indicator not only produces entry signals but also defines the strength of the market momentum. This feature helps traders to predict the length of the market trend and forecast the profit/loss margins while trading in the market. Friendly features and simple chart demonstrations have made this indicator quite interesting to newbie traders.
Extremum Indicator is applicable to trade any forex currency pair you like around the financial markets. Furthermore, this indicator fits great with all sorts of timeframe charts within the MT4 trading platforms.
Extremum Indicator Overview
After the installation of the Indicator at the MT4 terminal, your trading chart will appear like the following image:
Extremum Indicator Anatomy
The Indicator uses a separate oscillator window for demonstrating the trade signals. For the confirmation of the bullish trend, the indicator value must turn positive. In such a scenario, you’ll see the indicator bars turn blue for better understanding.
Oppositely, the indicator value turns negative and plots green bars to signal the short entry along with the confirmation of the bearish trend.
You’ll also find a dual-band (red & yellow) around the indicator bars. The band gets wider to express the higher strength of the market trend. A narrow band signals the weakness of the current trend.
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Extremum Indicator: Buy Conditions
- This Indicator turns positive and its bars turn blue
- A bullish bar forms near the current swing low of the market
- Buy triggers at the break of the respective bullish bar’s high
- Set stop loss below the low of the signaling bar
- Exit long/take profit whenever the indicator band starts to get narrower
Extremum Indicator: Sell Conditions
- This Indicator turns negative and its bars turn yellow
- A bearish bar forms near the current swing high of the market
- Sell triggers at the break of the respective bearish bar’s low
- Set stop loss above the high of the signaling bar
- Exit short/take profit whenever the indicator band starts to get narrower