Better Overbought Oversold Indicator

Better Overbought Oversold Indicator

Forex BUY and SELL signals from the best Better Overbought Oversold indicator. Creates Moving Average on the chart. Accurate trend detector.

Categories: MT4, Oscillator, Informational

The Better Overbought Oversold (BOO) is a simple MT4 indicator that looks identical to the RSI. The indicator comprises a single moving average line, a signal line that presents us with overbought and oversold conditions.

Like the RSI, this indicator oscillates between 0 and 100. For example, level 70 is an overbought condition, while 30 is an oversold condition. When the MA line oscillates between these levels, it presents us with a BUY/SELL signal.

The indicator also comes with the overbought and oversold bars, which mentions the prevailing levels.

The good thing about this indicator is you can apply it on any timeframe. However, when looking for trading signals, traders should apply the indicator on longer timeframes, as the indicator can produce false signals on lower timeframes.

BOO Indicator BUY/SELL signals

The above GBP/USD H4 chart shows BUY and SELL signals with the indicator.

The indicator presets BUY and SELL signals by pointing overbought and oversold levels.

Whenever the market goes up, the indicator is showing above 70, the market is in an overbought condition, and traders should look for a downward move.

On the flip side, when the market goes down and the indicator is below 30, it’s a good time to enter long positions or exit the short ones.

The indicator works best on every timeframe, but it’s useful to apply it on longer timeframes like the daily or weekly chart. This way, it presents an overall picture of the market rather than focusing on a certain timeframe.

For scalping and intra-day trading, the indicator can produce a lot of false signals, so it’s best to apply it on longer timeframes.

Which indicator is best for overbought oversold?

Many overbought oversold indicators like the RSI, Stochastics, Overbought/Oversold, CCI, and others. One indicator isn’t best than others and depends on a trader’s strategy.

What is an oversold overbought position?

The oversold positions occur when the Overbought Oversold indicator falls below 30. It’s a sign that the market is ending its downtrend soon. On the other hand, the overbought position emerges when the BOO indicator exceeds 70. It’s a sign of an uptrend reversal.

Conclusion
The BOO plots overbought/oversold levels to suggest BUY and SELL signals. In addition, the indicator provides exact entry and exit points. Also, the indicator is free to download, which makes it easily accessible for all forex traders.

You can also combine this indicator with other indicators like the RSI or MACD.