Introduction to the Kuskus Starlight Indicator
There are many ways traders identify trends and momentum. Some use price action and naked charts while others use technical indicators. One of the most popular ways traders identify trend and momentum is with the use of oscillators. The Kuskus Starlight is an example of such momentum oscillator.
What is the Kuskus Starlight Indicator?
The Kuskus Starlight Indicator is an oscillator type of momentum technical indicator. It plots “x” marks on its own indicator window. These “x” marks oscillate around its midline which is zero.
Positive “x” marks indicate a bullish momentum, while negative “x” marks indicate a bearish momentum.
The oscillations of the “x” marks tend to be quite smooth, yet responsive at the same time.
How the Kuskus Starlight Indicator Works?
The Kuskus Starlight Indicator uses a complex mathematical computation which is somehow closely related to the Fisher Transform Indicator method.
It computes for momentum based on the price oscillations within a given period. It also uses a smoothing effect on its formula, which is why it creates an oscillation which is relatively smooth compared to other oscillators.
How to use the Kuskus Starlight Indicator for MT4
The Kuskus Starlight Indicator has several options which can be modified within its settings.
“Range Periods” modifies the number of bars the indicator would use for its computation.
“Price Smoothing” and “Index Smoothing” are the smoothing variables used by the indicator. The numbers used for these variables should not be negative and should also not be more than 1.
“Draw Type” refers to how the oscillator is presented.
Option “1” would plot lines that oscillate around zero.
Option “2” plots histogram bars.
Option “3” plots the “x” marks which is the default of this indicator.
“Draw Size” modifies the size of the lines, bars, or “x” marks that the indicator plots.
This indictor can be used as a momentum direction filter. Traders can trade exclusively in the momentum direction indicated by the indicator.
It can also be used as a momentum reversal indicator. The shifting of the lines, histogram bars, or “x” marks above or below zero can be used as a momentum reversal signal.
Buy Trade Setup
When to Enter?
Identify an uptrend market. Wait for a deep pullback allowing the Kuskus Starlight line or bars to temporarily dip below zero. Open a buy order as soon as the line or bars cross back above zero. Set the stop loss on the support below the entry candle.
When to Exit?
Close the trade as soon as price action shows signs of a bearish reversal.
Sell Trade Setup
When to Enter?
Identify a downtrend market. Wait for a deep pullback allowing the Kuskus Starlight line or bars to temporarily breach above zero. Open a sell order as soon as the line or bars cross back below zero. Set the stop loss on the resistance above the entry candle.
When to Exit?
Close the trade as soon as price action shows signs of a bullish reversal.
Conclusion
The Kuskus Starlight Indicator plots an oscillator which can provide reliable trend and momentum signals. However, the signals it produces can sometimes be quite lagging causing traders to have smaller profits than they would have if they opened trades prior to the signals this indictor produces. The effects of the lag, however, can be decreased by changing the “Range Periods” to a lower number, such as 10. This would cause the indicator to be more sensitive to price changes, but it could also be more susceptible to false signals due to price spikes.
Recommended MT4/MT5 Brokers
XM Broker
- Free $50 To Start Trading Instantly! (Withdraw-able Profit)
- Deposit Bonus up to $5,000
- Unlimited Loyalty Program
- Award Winning Forex Broker
- Additional Exclusive Bonuses Throughout The Year
>> Sign Up for XM Broker Account here <<
FBS Broker
- Trade 100 Bonus: Free $100 to kickstart your trading journey!
- 100% Deposit Bonus: Double your deposit up to $10,000 and trade with enhanced capital.
- Leverage up to 1:3000: Maximizing potential profits with one of the highest leverage options available.
- ‘Best Customer Service Broker Asia’ Award: Recognized excellence in customer support and service.
- Seasonal Promotions: Enjoy a variety of exclusive bonuses and promotional offers all year round.
>> Sign Up for FBS Broker Account here <<
(Free MT4 Indicators Download)
Click here below to download: