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a simple indicator i made up, gives some good signals and some bad. i couldn't find a decent filter so perhaps someone else can. the attached chart is biased to show what it can do, the buy (blue) and sell (orange) dots are drawn at the open of the candle they mark. the grey dots mark the SL and TP accordingly. indicator is based on the previous candles activity, so does NOT redraw.

What are your rules? Which currency pairs have you tested this on? You show 4H charts here, have you tried other time frames?

What is your indicator calculating?

Hi walb99,

This indicator will check if the previous bars close & open are above or below the previous 2 period ema of the close.

If the open & close a bar ago are both above the 2 period ema of the close a bar ago the pair is considered overbought and a sell signal is triggered.

If the open & close a bar ago are both below the 2 period ema of the close a bar ago the pair is considered oversold and a buy signal is triggered.

A good point about the indicator is that it is objective. It wll never draw on the 0 bar.

Regards,
lucidlamp

enter when you see a dot in the direction the dot specifies, all pairs all timeframes.

Would perhaps be better if dots were changed to up and down arrows (in bold), for easier visual use?

SetIndexArrow(0,233);
SetIndexStyle(0,DRAW_ARROW,STYLE_SOLID,1);
SetIndexDrawBegin(0,-1);
SetIndexBuffer(0, v1);
SetIndexLabel(0,"Buy");

SetIndexArrow(1,234);
SetIndexStyle(1,DRAW_ARROW,STYLE_SOLID,1);
SetIndexDrawBegin(1,-1);
SetIndexBuffer(1, v2);
SetIndexLabel(1,"Sell");

Thank you trevman and lucidlamp for sharing the idea and for the explanation.

The problem with this indecator is perhaps the philosophy behind it that you should wait for overbought and oversold situations. This common philosphy is imho more often than not misleading. An alternative philosophy could be to wait for contraction and expansion of price-movements and trade into the direction of the new direction (enter) until it's loosing power (exit). E.g. BBands are based on this philosophy.