The Price Movement Strength indicator displays the direction and strength of the price change in the form of a candle on each price bar. If the indicator shows the closing level of the candle equal to zero on the current bar, then the price has not changed during bar. If the indicator shows a green candle, then the price of the trading instrument is growing, and vice versa, a red candle signals a price fall.
Input parameters:
The indicator has two parameters for setting buy/sell levels: BuyLevel and SellLevel. Parameter values are set in percentage.
For example, if the parameter BuyLevel = 1, then this means that the buy level corresponds to 1% of the price change upwards.
There is also an EnableAlert parameter to enable/disable notifications when buy/sell levels are reached.
ResetEachBar parameter to enable/disable the calculation mode either relative to the opening price of the current candle/bar ( ResteEachBar=true ) or relative to the opening price of a candle/bar one hour ago, if the current timeframe is H1, four hours ago, if the current timeframe is H4, and so on, depending on the current timeframe, the indicator will calculate the change in the current price relative to the corresponding opening price of the M1 candle/bar.
The indicator works on any trading instruments and timeframes.
An example of using the indicator in trading:
- When the closing price of the green candlestick of the indicator crosses above the BuyLevel level: open a BUY deal.
- When the closing price of the red candlestick of the indicator crosses below the SellLevel level: open a SELL deal.
- If the closing price of the indicator candle is in the range between the SellLevel and BuyLeve l levels, then there are no strong movements in the market and the deal is not opened.
Additionally, you can use the indicator on lower timeframes to confirm the signal on a higher timeframe.
Also, the Price Movement Strength indicator can be used in strategies that catch a price rollback after a powerful movement, in this case, higher values are set in the BuyLevel and SellLevel input parameters and transactions are opened in the opposite direction to the price movement.
