The RSI Peak & Valley Levels Forex indicator for MT4 is an enhanced version of the classic RSI technical indicator and draws peak & valley arrows on the chart.
The indicator oscillates between the 0 and 100 extreme boundaries.
The 0 level is considered extremely oversold, while the 100 level is considered extremely overbought.
Key Points
- Enhanced RSI technical indicator
- Draws peak & valley arrows on the chart
- Combine with a trend indicator
- Works well for trade entry in any market
- Well worth adding to your indicator collection
This indicator can work together with any existing trading strategy or system as a simple buy/sell entry confirmation tool.
Free Download
Download the “rsi-peak-valley-levels.mq4” MT4 indicator
Example Chart
The EUR/USD 5-minute chart below shows the RSI Peak & Valley Levels indicator in action.
Buy/Sell Trading Signals
Signals from the RSI Peak & Valley Levels Forex indicator for Metatrader 4 are easy to interpret and go as follows:
BUY:
- Open a long trade when the RSI oscillator touches the 0 extremely oversold level and the overall trend is upward.
- Place a stop loss below the previous swing low level.
- Take profit at the RSI 100 level or deploy your own take profit method.
SELL:
- Open a short trade when the RSI oscillator touches the 100 extremely overbought level and the overall trend is downward.
- Place a stop loss above the previous swing high level.
- Take profit at the RSI 0 level or deploy your own take profit method.
Download Now
Download the “rsi-peak-valley-levels.mq4” MT4 indicator
Enhanced Trading Strategy: Combining RSI Peak & Valley Levels with Bollinger Bands
Overview
To improve the reliability of trade signals, this strategy integrates the RSI Peak & Valley Levels Indicator with Bollinger Bands.
While the RSI Peak & Valley Levels Indicator identifies potential overbought and oversold conditions, Bollinger Bands provide insights into market volatility and potential price reversals, helping to filter out false signals.
Required Indicators
- RSI Peak & Valley Levels Indicator: Highlights peak and valley points on the RSI, indicating potential overbought and oversold conditions.
- Bollinger Bands: Consists of a moving average (middle band) and two standard deviation lines (upper and lower bands) that adjust to market volatility.
Trading Rules
Buy Setup
- Wait for the RSI Peak & Valley Levels Indicator to display a valley signal, indicating an oversold condition.
- Confirm that the price has touched or breached the lower Bollinger Band, suggesting potential price reversal.
- If both conditions are met, enter a long position.
- Place a stop loss below the recent swing low.
- Set a take profit target at the middle or upper Bollinger Band, or use a risk-to-reward ratio of at least 1:2.
Sell Setup
- Wait for the RSI Peak & Valley Levels Indicator to display a peak signal, indicating an overbought condition.
- Confirm that the price has touched or breached the upper Bollinger Band, suggesting potential price reversal.
- If both conditions are met, enter a short position.
- Place a stop loss above the recent swing high.
- Set a take profit target at the middle or lower Bollinger Band, or use a risk-to-reward ratio of at least 1:2.
Tips for Implementation
- Apply this strategy on time frames of 15 minutes or higher to reduce market noise.
- Use additional tools like support and resistance levels to identify optimal entry and exit points.
- Always test the strategy on a demo account before applying it to live trading.
Strategy Conclusion
By combining the RSI Peak & Valley Levels Indicator’s momentum-based signals with the volatility insights provided by Bollinger Bands, traders can enhance the accuracy of their entries and exits. This integrated approach aims to provide more reliable trading opportunities in various market conditions.
Adjustable Parameters & Settings
Period RSI, price, level overbought, level oversold, arrow size, alerts
Feel free to explore the indicator’s different parameters and settings to create your own personalized indicator setup.
More Info About This Indicator
Currency Pairs: works on any currency pair
Trading Platform: developed for Metatrader 4 (MT4)
Time Frames: works on any time frame
Indicator Type: RSI
How to install the RSI Peak & Valley Levels indicator in Metatrader 4?
- Copy and paste the rsi-peak-valley-levels.mq4 indicator into the MQL4 indicators folder.
- You can access this folder from the top menu as follows:
- File > Open Data Folder > MQL4 > Indicators (paste here)
