Up Down Indicator

Up Down Indicator

If you’re a novice forex trader, check out this indicator that gives simple and easy-to-use buy and sell signals. It’s called the Up Down indicator.

The Up Down indicator is a trend trading indicator that attempts to simplify trading for forex traders of all skill levels. It appears on your MT4 chart as a series of green and red dots forming bars underneath and above the candlesticks, respectively. The green dots show that the market is on an uptrend, while the red dots signify a downtrend.

The strength of the Up Down indicator is in the way it gives its signals without crowding the screen with confusing colors. Moreso, its signals, when used rightly, have earned traders more pips than it has lost them.

So, how do you use it?

How To Trade Using The Up Down Indicator
Trading this Metatrader Indicator is pretty simple. Here’s how to go about making trades using this indicator:

Trade Entries Strategy
Keep your eyes on the dots. What you’re looking for is when the dots form a step in either the upward or downward direction.

So, for a bullish trade, you wait for the completion of the first bar of green dots after the red dots. This usually happens are the end of trends. A bar often forms after a minimum of four consecutive green dots. But depending on the trend and the currency pair, over four dots could make up a bar. Once that bar is fully formed, and the following dot forms a step above the previous bar, that is your entry. Take it.

The same thing goes for bearish trades, but vice versa. You’re to sell once the red dots take a step downwards from the first bar.

Trade Exit Strategy
Exiting a trade is just as easy. If you were to rely on this indicator alone, you would wait for the first bar of dots in the opposite direction to your trade. So, if you were previously on an uptrend, you’re looking for the first bar of red dots to close your trade. And if you’re riding the bearish trend, the first bar of green dots is a sign to exit the trade.

However, there are many other strategies to exit a trade. For instance, you could use technical price action tools, such as support and resistance zones (and their breakouts), channels, etc. You can also exit when the price returns to your trend lines and you’re not sure where the price would go from there.

Conclusion
The Up Down indicator is best for novice traders because of the simplicity with which it gives its signals.