Introduction to the Waddah Attar Explosion Indicator (MT4)
High probability trade entry signals are probably some of the most coveted technical indicators. Such trade signals are often based on a confluence of factors which are objectively measured by an underlying algorithm or formula.
The Waddah Attar Explosion indicator is one of such indicators that can provide high probability trade signals based on confluences.
What is the Waddah Attar Explosion Indicator?
The Waddah Attar Explosion indicator is trend and momentum following technical indicator. It somehow measures trends as trend power, and momentum as explosion power.
It identifies and indicates trend direction as histogram bars that change color depending on the direction of the trend. Green bars indicate a bullish trend direction, while red bars indicate a bearish trend direction.
This indicator also plots a line which acts as a signal line or a marker for the threshold of the momentum.
How the Waddah Attar Explosion Indicator Works?
As mentioned earlier, the Waddah Attar Explosion Indicator coins trends as trend power, and momentum as explosion power.
Based on the computation of the Waddah Attar Explosion indicator, it somehow derives its trend power indication from an underlying Moving Average Convergence and Divergence (MACD) computation.
As for the momentum or explosion power, it also seems to base its computation on an underlying iBands type of computation, which in turn is also based on the Bollinger Bands. Knowing that the Bollinger Bands is an effective tool to measure momentum and anticipate breakouts, the basis of the Waddah Attar Explosion power does have strong merits.
How to use the Waddah Attar Explosion Indicator for MT4
The Waddah Attar Explosion indicator is both a trend following indicator and a momentum breakout indicator. Traders can use it as such.
Traders can identify trend direction based on the color of the histogram bars. Momentum breakouts can also be identified based on a histogram bar closing above the threshold signal line. Traders can use these signals as a momentum breakout signal in confluence with other trend direction indicators or trade setups.
Buy Trade Setup
When to Enter?
Identify a market that is in an uptrend based on other technical indicators or based on price action. Enter a buy order as soon as a green bar crosses above the threshold line. Set the stop loss on the support below the entry candle.
When to Exit
Close the trade as soon as a histogram bar changes to red.
Sell Trade Setup
When to Enter?
Identify a market that is in a downtrend based on other technical indicators or based on price action. Enter a sell order as soon as a red bar crosses below the threshold line. Set the stop loss on the resistance above the entry candle.
When to Exit?
Close the trade as soon as a histogram bar changes to green.
The Waddah Attar Explosion indicator is an excellent signal indicator. This is because by itself, it already provides trade signals based on a confluence of trend and momentum.
However, as good as it is, it still has to be used as a part of a bigger picture trading strategy. This should include either additional trend following indicators or a price pattern-based trade setup.
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