The RSI Candles forex indicator for MT4 uses a combination of 4 different RSI values (High, Low, Open, and Close) and displays the result as blue and red colored RSI candles in a separate MT4 window below the main chart.
Blue RSI candles suggest the pair is uptrending, while red RSI candles suggest the pair is downtrending.
Combine this indicator with other technical tools for more accurate trend predictions.
For example, combine with simple or exponential moving averages.
Price above the moving average? Trade the blue RSI candles and ignore the red RSI candles.
Price below the moving average? Trade the red RSI candles and ignore the blue RSI candles.
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Download the “RSI_candles.mq4” MT4 indicator
Indicator Chart (GBP/USD H1)
The GBP/USD H1 chart below displays the RSI Candles Metatrader 4 forex indicator in action.
Basic Trading Signals
Signals from the RSI Candles MT4 forex indicator are easy to interpret and go as follows:
Buy Signal: Open a buy trade when a blue RSI candle appears below the main activity chart.
Place a stop loss 2-3 pips below support or use your own preferred SL method.
Sell Signal: Open a sell trade when a red RSI candle appears below the main activity chart.
Place a stop loss 2-3 pips above the resistance level or use your own preferred SL method.
RSI Candles and DSP GO Oscillator Forex Strategy for MT4
This MT4 strategy combines the RSI Candles MT4 Indicator with the Detrended Synthetic Price GO Oscillator MT4 Indicator.
The RSI Candles indicator provides clear entry signals with blue candles indicating a buy and red candles indicating a sell.
The DSP GO Oscillator confirms the trend direction with a green line signaling bullish momentum and an orange line signaling bearish momentum.
This strategy works well on M5, M15, and H1 charts for intraday trading.
By combining entry signals with trend confirmation, traders can enter trades with higher probability while avoiding countertrend moves.
Buy Entry Rules
- The DSP GO Oscillator line must be green, confirming a bullish trend.
- The RSI Candles must turn blue, signaling a buy entry.
- Enter long at the close of the blue RSI candle while the DSP GO line remains green.
- Place a stop loss below the recent swing low or support level.
- Take profit when the DSP GO line turns orange, indicating a potential trend reversal, or trail the stop to lock in profits.
Sell Entry Rules
- The DSP GO Oscillator line must be orange, confirming a bearish trend.
- The RSI Candles must turn red, signaling a sell entry.
- Enter short at the close of the red RSI candle while the DSP GO line remains orange.
- Place a stop loss above the recent swing high or resistance level.
- Take profit when the DSP GO line turns green, indicating a potential trend reversal, or trail the stop to secure profits.
Advantages
- Helps identify trades in the direction of the prevailing trend, reducing countertrend risk.
- Dynamic exit using DSP GO trend flips allows capturing extended moves instead of fixed pips.
- Visual signals from both indicators reduce the need for complex analysis.
- Adaptable to multiple time frames for intraday and swing trading.
- It can be used on a wide range of currency pairs, increasing trading opportunities.
- Combining momentum (RSI candles) with trend direction (DSP GO) improves signal reliability.
Drawbacks
- Trend flips can be late or early, potentially reducing profits or triggering premature exits.
- It may generate fewer signals on slow-moving currency pairs or during off-peak hours.
- Scalpers may need quick execution and tight spreads to avoid losses on minor fluctuations.
Case Study 1
EURJPY M15 during the London session showed the DSP GO Oscillator line turning green.
Shortly after, the RSI Candles turned blue.
A long trade was entered with a stop loss below the recent swing low.
Price moved upward steadily, and the trade was closed when the DSP GO line turned orange, capturing a 38-pip profit.
Aligning the entry with trend confirmation helped secure a strong intraday move.
Case Study 2
AUDUSD M5 during the New York session showed the DSP GO Oscillator line turning orange, signaling a bearish trend.
The RSI Candles then turned red, confirming the sell entry.
A short trade was opened with a stop loss above the recent swing high.
Price moved downward quickly, and the trade was closed when the DSP GO line flipped green, capturing a 25-pip gain.
Using trend confirmation minimized the risk of countertrend losses.
Strategy Tips
- Trade primarily during high liquidity sessions such as London and New York for stronger trend momentum.
- Wait for both the RSI candle and DSP GO line to align before entering a trade to reduce false signals.
- Use higher time frames to confirm the overall trend and avoid trading against larger momentum.
- Move the stop loss to breakeven once the trade has gained halfway to the trend flip exit.
- Focus on currency pairs with clear volatility to maximize scalping and intraday opportunities.
- Patience is key: skip minor RSI candle changes if the DSP GO line does not confirm the trend.
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Download the “RSI_candles.mq4” Metatrader 4 indicator
MT4 Indicator Characteristics
Currency pairs: Any
Platform: Metatrader 4
Type: chart window indicator
Customization options: Variable (RSI period), Width & Style.
Time frames: 1-Minute, 5-Minutes, 15-Minutes, 30-Minutes, 1-Hour, 4-Hours, Daily, Weekly, Monthly
Type: RSI
