The EWO Divergence Forex indicator for Metatrader 4 is a signals indicator that finds bullish and bearish divergences between price and indicator.
The EWO Divergence indicator can be used to find high probability trend reversal entries and exits.
Buying and selling currency pairs with the EWO Divergence indicator is easy to accomplish:
- A green buy arrow represents a buy trade (bullish divergence).
- A red arrow represents a sell trade (bearish divergence).
The indicator works equally well on all assets (Forex, CFD stocks, Indices, Cryptocurrencies, Commodities, etc.) and shows promising results if used correctly.
Free Download
Download the “ewo-divergence-indicator.mq4” indicator for MT4
Indicator Chart (EUR/USD H1)
The example chart below displays the EWO Divergence mt4 indicator in action on the trading chart.
Tips:
Feel free to use your own favorite trade entry, stop loss and take profit method to trade with the EWO Divergence Forex indicator.
As always, trade in agreement with the overall trend and practice on a demo account first until you fully understand this indicator.
Please note that even the best trading indicator cannot yield a 100% win rate over long periods.
Indicator Specifications & Inputs:
Trading Platform: Developed for Metatrader 4 (MT4)
Currency pairs: Works for any pair
Time frames: Works for any time frame
Trade Style: Works for scalping, day trading and swing trading
Input Parameters: Variable (inputs tab), color settings & style
Indicator type: Divergence
Does the indicator repaint? No.
MT4 Day Trading Strategy: EWO Divergence & Zero Lag MACD
This day trading strategy combines the EWO Divergence and Zero Lag MACD indicators for MT4 to identify high-probability trade setups.
The EWO Divergence detects potential reversals by comparing price action with the EWO oscillator.
The Zero Lag MACD provides timely trend-following signals with minimal delay.
This strategy is best suited for lower timeframes, such as M5 and M15, ideal for active day traders.
Buy Entry Rules
- Wait for the EWO divergence indicator to cross back above the zero level.
- Wait for the Zero Lag MACD histogram to cross above the zero line.
- Enter a buy trade at the close of the confirming candle.
- Place the stop loss below the most recent swing low.
- Set a take profit target at a risk-reward ratio of 1:2, or exit when the Zero Lag MACD turns back below the zero level.
Sell Entry Rules
- Wait for the EWO divergence indicator to cross back below the zero level.
- Wait for the Zero Lag MACD histogram to cross below the zero line.
- Enter a sell trade at the close of the confirming candle.
- Place the stop loss above the most recent swing high.
- Set a take profit target at a risk-reward ratio of 1:2, or exit when the Zero Lag MACD crosses back above the zero line.
Advantages
- Reduced lag from the Zero Lag MACD allows quicker entries and exits.
- EWO Divergence effectively identifies potential trend reversals.
- Clear buy and sell signals simplify trading decisions.
- Applicable to various currency pairs and timeframes.
Drawbacks
- Requires active monitoring and timely trade execution.
- Less effective during low volatility or major news events.
Example Case Studies
Case Study 1: EUR/GBP (5-Minute Chart)
The EWO Divergence turned back above the zero line. The Zero Lag MACD histogram crossed above the zero line, confirming bullish momentum.
A buy trade was entered at the close of the confirming candle with a stop loss below the recent swing low and a take profit at twice the risk.
The price moved upward, hitting the take profit target successfully.
Case Study 2: AUD/JPY (15-Minute Chart)
The EWO Divergence indicated crossed back below the zero level. The Zero Lag MACD histogram crossed below zero, signaling bearish momentum.
A sell trade was executed at the close of the confirming candle, stop loss placed above the recent swing high, and take profit set at twice the risk.
The trade reached the take profit level as the price declined.
Strategy Tips
- Focus on high liquidity currency pairs to minimize slippage.
- Maintain a trading journal to track performance and refine strategy.
- Always use proper risk management, including stop losses and position sizing.
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Download the “ewo-divergence-indicator.mq4” indicator for Metatrader 4
