Filter AO Indicator is a forex scalping tool, used to accumulate the price action data over the selected period of time and filter them into smooth momentum signals. Besides, it also screens the strength or depth of the market momentums that helps traders to decide on market entry and exits. This scalping tool can be applied to trade all kinds of forex currency pairs.
Filter AO Indicator uses a very simple method for demonstrating the trade signals so that the newbie traders can also follow. Moreover, you can add it to any other trend-following strategies as a momentum-filter for greater trading accuracy.
Filter AO Indicator Overview
Download and install Indicator on your MT4 terminal. Once you’re done, your chart will transform like the following image:
Filter AO Indicator Explanation
Filter AO Indicator has been developed as a scalping or short-term trading tool. It lags a little but also avoids frequent signals for maintaining a higher level of accuracy.
The Filter value turns positive means the momentum is bullish and turns negative when the momentum switches to the bearish mode.
Besides determining the direction of the market momentum, it also signals the strength level of the momentum. The bars turn yellow with an increasing value means the bulls are in control of the market.
On the other hand, red bars with a decline in value means the market is under the control of the bears.
Filter AO: Buy Conditions
- FIlter AO value turns positive
- The filter bars turn into yellow color
- Buy triggers after the above conditions are met
- Set stop loss below the recent low of the market
- Exit long/take profit whenever the indicator bars turn red
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Filter AO: Sell Conditions
- FIlter AO value turns negative
- The filter bars turn into red color
- Sell triggers after the above conditions are met
- Set stop loss above the recent high of the market
- Exit short/take profit whenever the indicator bars turn yellow