The SSL Indicator represents a 10-days moving average specially configured for generating short-term trend reversal signals.
Despite being a day trading tool, the SSL indicator is relatively steady in responding to price changes and generating buy/sell signals. Newbie forex day traders seeking consistent results may find this trend indicator extremely useful.
The SSL Indicator uses a single trendline plotted with dots that define the current trend condition.
Besides trend-following trades, the SSL line also assists in spotting solid price breakout levels. However, it may produce false signals during choppy markets. Therefore, using other essential tools like support/resistance and Fibonacci alongside SSL may help you avoid weak trade setups.
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The assessment of the current trend condition depends on the price level compared to the SSL curve position.
During a bull run, the price always remains higher than SSL. When the price turns lower than the indicator curve, we consider it a bearish trend reversal condition.
Monitoring how the price reacts at the trendline is a crucial task for SSL users. Since it doesn’t show a price rejection sign, you’ll need to assess whether the market treats the trendline as support or resistance.
For instance, a bearish pin bar appearing right below the indicator level means the price treats the respective zone as resistance, and it is time to look forward to a selling opportunity.
SSL Indicator for MT4: Buy Conditions
- The price plots a bullish breakout at the SSL level
- A bullish candlestick pattern forms right above the indicator’s curve
- SL below the current trendline zone
- Take profit after the price drops below the SSL line
SSL Indicator for MT4: Sell Condition
- A bearish breakout occurs at the SSL level
- The price plots a bearish candle and treats the trend-curve as resistance
- SL above the current resistance
- Exit short when the price moves above the SSL level