The overbought & oversold trading channel indicator for Metatrader 5 is an interesting Forex tool that can help you finding the best trade entry and exit points.
The indicator appears in the chart as a blue overbought and orange oversold trading channel.
In order to get the most out of this tool, combine with a trend indicator and trade with the trend.
How to identify overbought and oversold market conditions?
- The market is oversold when price trades in the orange colored area.
- The market is overbought when price trades in the blue colored area.
The following indicator inputs and parameters can be modified: channels period, period of smoothing, overbought level, oversold level, applied price, colors, upper level of neutral zone, lower level of neutral zone.
The indicator should work equally well for any MT5 trading instrument, such as Forex, Stocks, Indices, Gold, etc.
Make yourself familiar with this technical indicator and test it first on a demo account for an extended period of time.
It supports all time frames and Forex pairs.
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The following chart shows how the Overbought & Oversold Trading Channel indicator looks like when applied to the MT5 chart.
How To Buy And Sell Currency Pairs With The Overbought & Oversold Trading Channel Indicator?
Find a simple trading example below:
- A buy signal is given when price trades in the orange colored oversold trading zone and the overall market trend is heading upward.
- Open a buy trade and place your stop loss order below the previous swing low.
- Exit the buy trade for a fixed take profit of hold the trade until the indicator reaches the blue colored overbought trading zone.
- A sell signal is given when price trades in the blue colored overbought trading zone and the overall market trend is heading downward.
- Open a sell trade and place your stop loss order above the previous swing high.
- Exit the sell trade for a fixed take profit of hold the trade until the indicator reaches the orange colored oversold trading zone.
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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 WRPC.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