Tuesday, October 18, 2011

Extremum Indicator

Extremum Indicator is used to find the extrema of the graph of the market, ie the places where the market turns and the current trend is replaced by its opposite. This indicator displays on the chart so-called volatility channel, which is necessary to search for extrema.
Indicator appears as two lines of red and green, as well as a histogram, which goes along these lines and has a property change color when you change the trend. The indicator is very simple. When the volatility in the market is small and flat, the distance between the lines of the indicator is reduced, and the histogram bars are close to the zero line. The signal is a reversal of the market is exactly the restriction of the volatility channel, and the narrower the channel, the more likely an early rapid turnaround. Pivot point on the graph can serve as a change of direction histogram display, well, or if you want, when you change its color.

When the market starts uptrend, the distance between the lines of the indicator increases, the histogram bars is also increased, but the upper part of the larger increases and changes its color to pink and the lower part of the histogram is green and does not increase so much. At the same downward trend, the distance between the lines as increases, but now the lower part of the histogram increases more than the upper and changes its color to yellow, and the top of the green.

The parameter y is only one indicator, " NBars "and he refers the number of bars used to calculate the indicator. If you reduce this number, the indicator is more "fast", while increasing - more quiet and smooth.

The use of trade:

This indicator is good for those who are developing a trading system based on the search for turning points in the market. The search for these very good points that can not miss the largest movement in the market, and "catch" is a movement at the beginning of its inception.

Point for entry into the market may be a change of direction (change color) histogram display, and output at its discretion, or after reversal of the histogram in the opposite direction.

You can also change the parameter " NBars "in one direction or another and use an indicator, such as scalping or long-term trading. Another variant of the indicator is its use on a single graph with multiple parameters, such as "fast", "medium" and "slow" and on this basis to develop a system that will use the same indicator, but with different parameters.
Download Extremum Indicator