About the Stealth Oscillator Indicator
The Stealth Oscillator Indicator for MT4 is a sophisticated technical tool that integrates two powerful moving average types to determine market momentum.
By combining the smoothing properties of a Simple Moving Average (SMA) with the predictive nature of the Least Squares Moving Average (LSMA), it provides a balanced view of price action.
The indicator is presented in a separate window below the main chart, featuring two distinct horizontal levels at +3.3 and -3.3.
While the upper level remains a constant red reference point, the lower bar serves as the primary signal generator by changing color.
This dual-average calculation allows the indicator to stay responsive to price shifts while filtering out minor volatility.
It is particularly effective for traders who prefer visual confirmation of trend shifts without the distraction of overlapping lines on their main workspace.
Free Download
Download the “stealth-oscillator.ex4” MT4 indicator
Key Features
- Utilizes a hybrid formula merging SMA and LSMA calculations for enhanced trend detection.
- Displays colored horizontal bars that provide immediate feedback on market sentiment.
- Includes fixed signal levels at -3.3 and +3.3 to standardize entry and exit zones.
- Eliminates the lag often found in standard moving averages by incorporating linear regression logic.
- Works across all timeframes and currency pairs, making it adaptable for various trading styles.
- Functions as a reliable trend-following filter to prevent trading against the dominant market bias.
Indicator Chart
The chart displays the Stealth Oscillator Indicator positioned at the bottom of the terminal.
The lower signal bar alternates between lime and red to indicate when the bulls or bears are in control.
In this setup, the constant upper red bar acts as a boundary while the lower bar dictates the timing for new trade positions based on color transitions.
Guide to Trade with the Stealth Oscillator Indicator
Buy Rules
- Observe the lower horizontal bar located at the -3.3 level in the indicator window.
- Wait for the Stealth Oscillator Indicator to change its color from red to lime.
- Ensure the current candle has fully closed to confirm the color change is permanent.
- Check that price is not currently consolidating in a tight, horizontal range.
Sell Rules
- Observe the lower horizontal bar located at the -3.3 level in the indicator window.
- Wait for the Stealth Oscillator Indicator to change its color from lime to red.
- Confirm that the red color persists through the close of the trading session candle.
- Look for a corresponding bearish price action candle on the main chart to validate the move.
Stop Loss
- Place the protective stop loss a few pips below the most recent structural low for buy trades.
- Set the stop loss orders just above the most recent swing high when initiating a sell.
- Consider using a trailing stop once the indicator bars show a sustained trend color.
- Vary your stop distance based on the Average True Range to account for daily volatility.
Take Profit
- Exit long positions immediately when the lower horizontal bar reverts from lime to red.
- Exit short positions immediately when the lower horizontal bar changes back to lime.
- Alternatively, target the next major support or resistance level identified on the daily chart.
Stealth Oscillator and VAR Moving Average MT4 Day Trading Strategy
This strategy combines the Stealth Oscillator Metatrader 4 Forex Indicator with the VAR Moving Average Metatrader 4 Forex Indicator.
The Stealth Oscillator provides green horizontal bars as buy signals and red bars as sell signals, giving clear entry points.
The VAR Moving Average uses a dotted line to show trend direction: green indicates a bullish trend and red a bearish trend.
Combining these indicators allows traders to enter trades in the direction of the trend while catching short-term momentum moves.
This strategy works well on M5, M15, and H1 charts, ideal for day traders looking for reliable intraday entries.
Buy Entry Rules
- Wait for a green horizontal bar from the Stealth Oscillator MT4 indicator.
- Confirm that the VAR Moving Average dotted line is green, indicating a bullish trend.
- Enter a long position at the close of the candle showing the green bar.
- Place a stop loss a few pips below the recent swing low or below a nearby support level.
- Set take profit at the next resistance level or use a 1:1.5 to 1:2 risk/reward ratio.
Sell Entry Rules
- Wait for a red horizontal bar from the Stealth Oscillator MT4 indicator.
- Confirm that the VAR Moving Average dotted line is red, indicating a bearish trend.
- Enter a short position at the close of the candle showing the red bar.
- Place a stop loss a few pips above the recent swing high or above a nearby resistance level.
- Set take profit at the next support level or use a 1:1.5 to 1:2 risk/reward ratio.
Advantages
- Trades aligned with the short-term trend reduce the risk of false signals.
- Clear and easy-to-read entries using oscillator bars and trend confirmation.
- Works on multiple intraday timeframes: M5, M15, and H1.
- Combines momentum and trend for better trade accuracy.
- Stop loss and take profit levels are easy to define for proper risk management.
Drawbacks
- Frequent false signals can occur during ranging or choppy markets.
- Lower timeframes like M5 may have increased slippage and spread costs.
- Requires active monitoring, not suitable for “set and forget” trading.
Case Study 1 (M15 Chart)
On EURUSD during the London session, the Stealth Oscillator shows a green bar at 09:15.
The VAR MA dotted line is green, confirming a bullish trend.
A long position is entered at 1.1052, stop loss at 1.1035, and take profit at 1.1082.
Price moves upward over the next 45 minutes and reaches the take profit target, giving a gain of approximately 30 pips.
Case Study 2 (H1 Chart)
On GBPUSD, the VAR MA dotted line turns red, indicating a bearish trend.
Shortly after, the Stealth Oscillator shows a red bar on the H1 candle.
A short position is entered at 1.2680, stop loss at 1.2720, and take profit at 1.2620.
Price declines over the next few hours and reaches the take profit, resulting in a 60-pip gain.
Strategy Tips
- Trade during active Forex sessions to reduce spread and slippage.
- Avoid trading when the VAR MA trend is flat or frequently flipping, signaling ranging conditions.
- Combine with support and resistance levels to improve entry and exit quality.
- Use proper position sizing and risk management, risking only a small percentage of your account per trade.
- Keep a trading journal to track which timeframes and currency pairs give the best results.
- Test the strategy on a demo account before trading live.
Download Now
Download the “stealth-oscillator.ex4” Metatrader 4 indicator
FAQ
Can I modify the +3.3 and -3.3 levels in the settings?
While the standard levels are optimized for the SMA and LSMA relationship, experienced traders can adjust the input parameters.
Changing these values will affect how the indicator interprets the distance between the two averages, potentially making it more or less sensitive to market volatility depending on your specific risk profile.
Is it better to use the Stealth Oscillator Indicator on higher timeframes?
Yes, higher timeframes like the H1 or H4 generally provide more reliable signals with the Stealth Oscillator Indicator.
Because it is a trend-following tool, the higher timeframes help smooth out the market noise that causes the horizontal bars to flip colors too frequently.
Using it on these charts often leads to capturing much larger price movements.
Summary
The Stealth Oscillator Indicator offers an effective way to visualize trend strength and direction through its unique horizontal bar system.
By leveraging the mathematical strengths of both the SMA and LSMA, it provides a balanced perspective that many standard oscillators lack.
The indicator excels in trending environments where it can capture large portions of a move from start to finish.
While its performance can dip during periods of low volatility, it remains a robust component of a diversified trading strategy.
For the best results, traders should combine its signals with volume analysis or price action patterns.
