The Composite Index indicator for Metatrader 5 is a valuable buy/sell trend trading tool composed of RSI and momentum.
The indicator appears in a separate chart window and it can be traded as a simple crossover trading system (see example chart).
Essentially, we are only concerned about the position of the green and red signal line.
It works as follows:
- A buy trend occurs when the green line is positioned above the red line.
- A sell trend occurs when the red line is positioned above the green line.
The following indicator inputs and parameters can be modified: price, RSI slow period, RSI fast period, momentum period, average period 1 & 2 & 3.
Make yourself familiar with this technical indicator and test it first on a demo account before using it on real trading account.
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The following chart shows how the Composite Index indicator looks like when applied to the MT5 chart.
How To Buy And Sell Currency Pairs With The Composite Index Indicator?
Find a simple trading example below:
- A buy signal is formed when the green signal line crosses above the red signal line from below.
- Open a buy order and place a stop loss slightly below previous swing support.
- Exit the buy trade for a fixed profit target, or wait for a sell signal to close the trade.
- A sell signal is formed when the green signal line crosses below the red signal line from above.
- Open a sell order and place a stop loss slightly above previous swing resistance.
- Exit the sell trade for a fixed profit target, or wait for a buy signal to close the trade.
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Frequently Asked Questions
How Do I Install This Custom Indicator On Metatrader 5?
- Open the MT5 trading platform
- Click on the File menu button located at the top left part of the platform
- Click on Open Data Folder > MQL5 folder > Indicators
- Copy the Composite index.mq5 indicator file in the Indicators folder
- Close and restart the trading platform
- You will find the indicator here (Navigator window > Indicators)
- Drag the indicator to the chart to get started with it!
How Do I Edit This Indicator?
- Click in the open chart with your right mouse button
- In the dropdown menu, click on Indicator List
- Select the indicator and click on properties
- Now you can edit the inputs, colors, levels, scale and visualization
- Finally click the OK button to save the new configuration