Introducing Extremum forex technical indicator. This is a very dynamic indicator system and might be a little bit confusing for beginning traders when using it for the first time. Anyway, it’s not that difficult to understand as you will see through this article. The extremum indicator is used for catching the trend when the market is on an upswing or a downswing. This indicator is built upon different oscillators, and histograms with different colors, we will point just a few things so that you don’t get confused. This tool might perform very poor on short time frames like 15-minutes, 5-minutes. It is excellent with proven successful results if only you’ll use it for the longer timeframes like daily or H4 or H1 time frame.
Install Extremum Indicator in your mt4 platform, your chart should look like this;
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When you’ve installed this Extremum indicator on your platform you will notice that it consist of two oscillators. The oscillator in the negative territory has a green appearance and the one in the positive territory looks red. You will also notice a pink histogram indicating a bullish signal, and a yellow histogram bars indicating bearish signal. To make things easier for you just ignore green bars of the histogram.
The standard rule applies here, only execute a sell order only in bearish market conditions and execute buying signals only in bullish markets.
NOTE! Be cautious with the Extremum indicator because it might provide you many false signals due to the complexity possessed by the indicator. However, if you invest time practicing, you will archive best results eventually.
Conditions For Buying Using Extremum Indicator.
- The market trend should be up.
- The Extremum indicator should print a pink histogram
- Place your long position as soon as above conditions are met.
- Place your stop loss just below the recent swing low.
- Take your profit when the pink histograms disappear.
Conditions For Selling Using Extremum indicator.
- The market should be bearish.
- The Extremum indicator Should print a yellow histogram.
- Place your short position as soon as above conditions are met.
- Place your stop loss just above the recent swing high.
- Take your profit when the yellow histograms disappear.
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