About the Smoothed RSI Forex Signal Indicator
The Smoothed RSI Forex Signal for Metatrader 4 is a fantastic signal indicator that’s based on RSI + a smoothed digital filter for increased accuracy.
The indicator gets displayed as a blue, gray, and pink colored oscillator in the bottom window of the trading platform.
This color-coded system allows you to identify the current market phase at a glance: blue for bullish momentum, pink for bearish pressure, and gray for neutral or ranging conditions.
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Download the “Smoothed RSI.mq4” indicator for MT4
Key Features
- It utilizes a digital smoothing algorithm to provide a cleaner signal line than standard oscillators.
- The indicator features a three-color system for instant identification of bull, bear, and neutral zones.
- The tool helps traders avoid “false breakouts” by waiting for confirmed momentum shifts.
- The sub-window placement keeps the main price chart clear for identifying horizontal levels.
Indicator Chart
The Smoothed RSI indicator chart features a dedicated window below the price action where the signal line oscillates.
When the line turns blue, it suggests that buyers have regained control and price is likely to climb.
A shift to pink indicates that sellers are dominating the current cycle.
By watching for the line to exit extreme overbought or oversold zones, a trader can easily spot the beginning of a fresh trend impulse.
Guide to Trade with Smoothed RSI Forex Signal Indicator
Trading with this tool involves monitoring the color-coded line to ensure you are always aligned with the filtered momentum of the market.
Buy Rules
- Monitor the indicator window for the transition where the gray or pink line turns blue.
- Open a buy trade position as soon as the indicator starts painting the blue colored line on the chart.
- Verify the entry by checking for a bullish candlestick close on the main price chart.
- Ensure the price is currently holding above a recent horizontal support level.
Sell Rules
- Watch for the signal line to shift from blue or gray into a pink color.
- Open a sell trade position as soon as the indicator starts painting the pink colored line on the chart.
- Confirm the signal by waiting for the current candle to close and lock in the color change.
- Check that the broader market trend is not currently in a strong bullish surge.
Stop Loss
- Secure your buy entry by placing the stop loss a few pips below the most recent swing low.
- Protect your sell trade by positioning the stop loss slightly above the latest swing high.
- Keep your risk parameters tight to account for the sensitivity of the smoothed momentum.
- Always maintain a fixed risk-to-reward ratio to ensure long-term account growth.
Take Profit
- Exit the trade when the indicator line changes back to a neutral gray or the opposite color.
- Target a 1:2 risk-to-reward ratio to maintain a statistical edge over the market.
- Consider closing the position when the oscillator reaches its extreme upper or lower boundaries.
- You can also trail your stop loss to lock in profits as the smoothed trend progresses.
Day Trading Strategy for MT4: Smoothed RSI Signal + Hull Trend Indicator
This day trading strategy combines the Smoothed RSI Forex Signal Indicator MT4 with the Hull Trend Forex Indicator MT4 to capture intraday market trends with precise entries.
The Smoothed RSI indicator generates signals when the line changes color: blue for buy trades and pink for sell trades.
The Hull Trend indicator confirms trend direction with blue candlesticks for bullish trends and red candlesticks for bearish trends.
Combining both indicators helps traders filter false signals and improve entry accuracy for day trading.
This strategy works best on M15 and M30 charts for day trading and is suitable for major currency pairs like EURUSD, GBPUSD, and USDJPY.
By combining trend confirmation with smoothed momentum signals, traders can capture intraday swings effectively.
Buy Entry Rules
- Check that Hull Trend candlesticks are blue, confirming a bullish trend.
- Wait for the Smoothed RSI line to start painting blue.
- Enter a buy trade at the close of the candle when the blue line appears.
- Set a stop loss below the recent swing low or nearby support level.
- Take profit targets can range between 15–30 pips on M15 charts and 30–50 pips on M30 charts.
Sell Entry Rules
- Check that Hull Trend candlesticks are red, confirming a bearish trend.
- Wait for the Smoothed RSI line to start painting pink.
- Enter a sell trade at the close of the candle when the pink line appears.
- Set a stop loss above the recent swing high or nearby resistance level.
- Take profit targets can range between 15–30 pips on M15 charts and 30–50 pips on M30 charts.
Advantages
- Combines smoothed RSI momentum signals with trend confirmation from Hull Trend candlesticks.
- Provides entry and exit points, reducing decision-making time.
- Works on multiple time frames for flexible intraday trading.
- Helps avoid counter-trend trades and improves overall win rate.
- Suitable for a variety of currency pairs with consistent trends.
Drawbacks
- Requires monitoring charts closely for proper entry timing.
- Spread and slippage can reduce profit potential on smaller M15 moves.
Case Study 1: EURUSD M15 – London Session
EURUSD showed blue Hull Trend candlesticks on the M15 chart, confirming a bullish trend.
The Smoothed RSI line started painting blue at 1.1008.
A buy trade was entered with a stop loss at 1.0995.
Within 40 minutes, price moved to 1.1035, achieving a 27-pip profit.
Case Study 2: GBPUSD M30 – New York Session
GBPUSD displayed red Hull Trend candlesticks on the M30 chart, indicating a bearish trend.
The Smoothed RSI line turned pink at 1.2785.
A sell trade was executed with a stop loss at 1.2810.
Within one hour, the price dropped to 1.2745, yielding a 40-pip gain.
Using both indicators together filtered false signals and provided a clear trend-aligned trade.
Strategy Tips
- Focus on major sessions with high liquidity for stronger trend moves.
- Wait for both the Hull Trend candlesticks and Smoothed RSI line to confirm direction before entering.
- Adjust take profit levels based on chart time frame and current volatility.
- Use stop losses based on recent swing points to minimize risk.
Download Now
Download the “Smoothed RSI.mq4” indicator for Metatrader 4
FAQ
How is this different from the standard RSI found in MT4?
The standard RSI can be very “noisy,” frequently moving up and down with every small price tick.
The Smoothed RSI applies a digital filter that averages out these small movements, providing a much smoother line that only changes color when a significant momentum shift occurs.
This helps you stay in trades longer and prevents you from being “shaken out” by minor price pullbacks.
Can I use this indicator for scalping?
Yes, the Smoothed RSI is excellent for scalping on the 1-minute and 5-minute charts.
Because it filters out the noise, it helps scalpers identify high-probability momentum bursts that are likely to follow through.
Just be sure to trade during active market hours to ensure there is enough volume to move the price in your favor.
What does the gray color in the oscillator mean?
The gray color represents a neutral market phase where there is no clear dominance from either the bulls or the bears.
This usually happens during a consolidation or a sideways range.
For many traders, the gray zone is a signal to stay on the sidelines and wait for the line to turn blue or pink before entering a new position.
Summary
The Smoothed RSI for MT4 is an effective momentum tool that assists in determining the appropriate timing for market entries.
By offering a clearer view of relative strength cycles, it helps you avoid the common mistake of chasing the market at exhausted price levels.
This tool helps traders maintain a consistent routine by highlighting levels where the market is statistically likely to reverse.
Using this indicator allows you to filter high-risk trades and focus on high-conviction momentum shifts.
