Stochastic Divergence Indicator for MT4

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Stochastic Divergence Indicator for MT4

Introduction to the Stochastic Divergence Indicator

Divergences are one of the techniques which are widely used by many professional traders. This is because divergences do tend to produce correct reversal signals with a very high yield. The question is which type of oscillator should we use?

Let us look into the Stochastic Divergence indicator which uses the Stochastic Oscillator to identify potential divergence based reversal signals.

What is the Stochastic Divergence Indicator?

The Stochastic Divergence indicator is a custom technical indicator which provides mean reversal signals. It does so by adding a divergence component on a Stochastic Oscillator.

This indicator plots lines connecting the peaks and dips on the Stochastic Oscillator as well as its corresponding peaks and dips on the price chart.

Lines below price action indicate a bullish divergence, while lines above price action indicate a bearish divergence. Solid lines indicate a regular divergence, while dotted lines indicate a hidden divergence. This indicator also plots arrows on the Stochastic Oscillator indicating a possible reversal based on divergence.

Stochastic Divergence Indicator for MT4

How the Stochastic Divergence Indicator Works?

The Stochastic Divergence indicator has a Stochastic Oscillator incorporated in it. This indicator simply compares the peaks of the oscillations to its next peak, as well as the dips with the next dip. It then compares the highs and lows corresponding the peaks and dips. If the trajectory of the connected lines diverges, then the Stochastic Divergence indicator will identify it as a divergence.

How to use the Stochastic Divergence Indicator for MT4

There are several variables that can be modified within the indicator settings. There are variables that pertain to the settings of the Stochastic Oscillator, the divergence indications and alerts displayed by the indicator, as well as the timeframe on which the underlying Stochastic Oscillator will be based on.

How the Stochastic Divergence Indicator Works

It is important that you match the “TimeFrame” variable with the current timeframe you are trading on for the indicator to display the correct divergences. The number encoded should be the number of minutes on the timeframe you are trading on.

To trade using this indicator, you can simply use the divergence signals indicated as a mean reversal signal. However, these signals are best used in confluence with other trade setups. It also works best when the signals come from an overbought or oversold price level.

Buy Trade Setup

When to Enter?

Wait for the Stochastic Oscillator to be oversold. Open a buy order as soon as the Stochastic Divergence indicator identifies a bullish divergence which is in confluence with a bullish reversal pattern. Set the stop loss below the pattern.

When to Exit?

Set the take profit target on the next resistance level.

How to use the Stochastic Divergence Indicator for MT4 - Buy Trade

Sell Trade Setup

When to Enter?

Wait for the Stochastic Oscillator to be overbought. Open a sell order as soon as the Stochastic Divergence indicator identifies a bearish divergence which is in confluence with a bearish reversal pattern. Set the stop loss above the pattern.

When to Exit?

Set the take profit target on the next resistance level.

How to use the Stochastic Divergence Indicator for MT4 - Sell Trade

Conclusion

Divergences based on the Stochastic Oscillator can be a viable confirmation of a possible mean reversal. The Stochastic Divergence indicator simplifies the process of identifying potential divergence signals by indicating such divergences automatically.

MT4 Indicators – Download Instructions

Stochastic Divergence Indicator for MT4 is a Metatrader 4 (MT4) indicator and the essence of this technical indicator is to transform the accumulated history data.

Stochastic Divergence Indicator for MT4 provides for an opportunity to detect various peculiarities and patterns in price dynamics which are invisible to the naked eye.

Based on this information, traders can assume further price movement and adjust their strategy accordingly. Click here for MT4 Strategies

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How to install Stochastic Divergence Indicator for MT4.mq4?

  • Download Stochastic Divergence Indicator for MT4.mq4
  • Copy Stochastic Divergence Indicator for MT4.mq4 to your Metatrader Directory / experts / indicators /
  • Start or restart your Metatrader 4 Client
  • Select Chart and Timeframe where you want to test your MT4 indicators
  • Search “Custom Indicators” in your Navigator mostly left in your Metatrader 4 Client
  • Right click on Stochastic Divergence Indicator for MT4.mq4
  • Attach to a chart
  • Modify settings or press ok
  • Indicator Stochastic Divergence Indicator for MT4.mq4 is available on your Chart

How to remove Stochastic Divergence Indicator for MT4.mq4 from your Metatrader Chart?

  • Select the Chart where is the Indicator running in your Metatrader 4 Client
  • Right click into the Chart
  • “Indicators list”
  • Select the Indicator and delete

Stochastic Divergence Indicator for MT4 (Free Download)

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