The ATM RSI Metatrader 4 forex indicator is an enhanced version of the popular RSI technical indicator.
This version comes with 4 different trading levels (25, 35, 65, 75).
Trading the ATM RSI Metatrader 4 forex is very similar to trading the traditional RSI indicator.
- The indicator deploys two extreme levels, the 25 level and the 75 level
- The 25 level is considered oversold while the 75 level overbought
- The 35 and 65 levels are entry levels to go either long or short
How it works
In uptrending markets, we wait for the RSI to fall back to the 25-35 oversold region to open a buy position.
Similarly, In downtrending markets, we wait for the RSI to rise back to the 65-75 overbought region to open a sell position.
It’s highly recommended to trade the ATM RSI oscillator indicator together with a trend following indicator such as the 75 period EMA or 100 period SMA.
The trend following indicator will show you trend direction and only trade signals from the ATM RSI indicator in the direction of the trend.
Trend up? Trade oversold signals and ignore the overbought signals from RSI.
Trend down? Trade overbought signals and ignore the oversold signals from RSI.
Free Download
Download the “atm-rsi-lido-indicator.mq4” MT4 indicator
Indicator Chart (EUR/USD M1)
The EUR/USD 1-Minute chart below displays the ATM RSI Metatrader 4 Forex indicator in action.
Basic Trading Signals
Signals from the ATM RSI MT4 forex indicator are easy to interpret and go as follows:
Buy Signal: Open buy trade when the ATM RSI indicator falls below the 25 level and then rises back above the 35 level.
Sell Signal: Open sell trade when the ATM RSI indicator rises above the 75 level and then falls back below the 65 level.
Trade Exit: Close the open buy/sell trade when an opposite signal occurs, or use your own method of trade exit.
ATM RSI + Afirma Forex Trend MT4 Strategy
This MT4 strategy combines the ATM RSI MT4 indicator and the Afirma Forex Trend MT4 indicator.
The ATM RSI identifies overbought and oversold conditions, signaling entries when momentum reverses.
A buy occurs when RSI rises back above 35 after falling below 25, and a sell occurs when RSI drops below 65 after rising above 75.
The Afirma Forex Trend confirms overall market bias: the blue line signals a bullish trend and the red line signals a bearish trend.
This strategy is suitable for M15 and H1 charts and can be applied to multiple currency pairs.
Buy Entry Rules
- The ATM RSI falls below 25 and then rises above 35, indicating bullish momentum.
- The Afirma Forex Trend line is blue, confirming a bullish trend.
- Enter a long trade immediately after RSI crosses above 35 and trend confirmation is in place.
- Place a stop loss below the recent swing low or below a recent support level.
- Take profit at the next resistance level or use a fixed reward-to-risk ratio of 1.5 to 1 or 2 to 1.
- Alternatively, trail stop while RSI remains bullish and Afirma trend stays blue.
Sell Entry Rules
- The ATM RSI rises above 75 and then falls below 65, signaling bearish momentum.
- The Afirma Forex Trend line is red, confirming a bearish trend.
- Enter a short trade immediately after RSI drops below 65 and trend confirmation is in place.
- Place a stop loss above the recent swing high or above a nearby resistance.
- Take profit at the next support level or use a fixed reward-to-risk ratio.
- Alternatively, trail stop while RSI remains bearish and Afirma trend stays red.
Advantages
- Combines momentum and trend confirmation, reducing false signals.
- Clear entry and exit rules based on RSI levels and trend direction.
- Adaptable to multiple currency pairs such as EURUSD, GBPUSD, AUDJPY, and USDCHF.
- Works well on M15 and H1 charts, allowing swing or intraday trading.
Drawbacks
- In sideways markets, RSI can trigger multiple false signals near the overbought or oversold levels.
- Trend line may lag slightly, causing entries to be delayed.
- Requires patience to wait for both RSI reversal and trend confirmation.
- Stop losses may be triggered in volatile markets with sharp spikes.
Example Case Study 1 (EURUSD H1 bullish trade)
On EURUSD H1, the ATM RSI fell to 22 and then crossed back above 35.
The Afirma trend line was blue, confirming a bullish trend.
A buy trade was entered at 1.1050. Stop loss was set at 1.1025, 25 pips below.
Price moved up to 1.1105, capturing 55 pips before partial profit was taken.
The RSI remained bullish and the Afirma trend stayed blue, allowing the trade to continue for an additional 20 pips profit.
Example Case Study 2 (GBPJPY M15 bearish trade)
On GBPJPY M15, the ATM RSI rose above 75 and then fell below 65.
The Afirma trend line was red, confirming a bearish trend.
A short trade was entered at 155.50. Stop loss was set at 155.80, 30 pips above.
Price declined to 154.90, capturing 60 pips profit.
The RSI remained below 65 and the Afirma trend stayed red, confirming strong bearish momentum.
Strategy Tips
- Focus on trading in the direction of the higher time frame trend to improve accuracy.
- Only take RSI reversal signals that coincide with Afirma trend confirmation for stronger setups.
- Consider waiting for a small pullback toward a support or resistance level before entering to improve the entry price.
- Limit scalping trades to periods of high liquidity to reduce slippage and spread impact.
- Monitor multiple currency pairs but avoid overtrading to maintain discipline.
- Use tighter stop losses on M15 charts and slightly wider on H1 charts to account for volatility differences.
- Combine this strategy with nearby pivot points or Fibonacci levels for better take profit targets.
- Skip trades when RSI moves too quickly without a clear trend confirmation to avoid chasing the market.
- Consider using a partial exit strategy once half the target is reached while letting the remaining position run with trend confirmation.
Download Now
Download the “atm-rsi-lido-indicator.mq4” Metatrader 4 indicator
MT4 Indicator Characteristics
Currency pairs: Any
Platform: Metatrader 4
Type: Chart pattern indicator
Customization options: Variable (RSI period) Colors, width & Style.
Time frames: 1-Minute, 5-Minutes, 15-Minutes, 30-Minutes, 1-Hour, 4-Hours, 1-Day, 1-Week, 1-Month
Type: oscillator
