The True Strength Index indicator for Metatrader 5 measures trend strength and reveals overbought and oversold market conditions for any pair.
The indicator pops up in a separate chart as a colored line that indicates the oversold and overbought market levels.
It’s recommended to utilize this tool in agreement with the overall currency trend (avoid counter-trend trading).
How to spot oversold/overbought market conditions?
- The market is considered oversold when the True Strength Index line touches the -25.0 level.
- The market is considered overbought when the True Strength Index line touches the 25.0 level.
The following indicator inputs and parameters can be modified: first smoothing period, second smoothing period, overbought (25.0), oversold (-25.0), style, colors.
Make yourself familiar with this technical indicator and test it first on a demo account.
It supports all time frames and Forex pairs.
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The following chart shows how the True Strength Index indicator looks like when applied to the MT5 chart.
How To Buy And Sell Forex Pairs With The True Strength Index Forex Indicator?
Find a simple trading example below:
- A buy signal occurs as soon as the red line crosses the -25.0 oversold level bottom-up and the overall market trend is in buy mode.
- Open a buy trade and place your stop loss 3 pips below immediate support.
- Exit the long position for a reward to risk ratio of at least 1.0, or wait for a sell signal.
- A sell signal occurs as soon as the red line crosses the 25.0 overbought level top-down and the overall market trend is in sell mode.
- Open a sell trade and place your stop loss 3 pips above immediate resistance.
- Exit the short position for a reward to risk ratio of at least 1.0, or wait for a buy signal.
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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 True_Strength_Index.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