Today I want to talk about the technical analysis tool, which despite its simplicity allows you to increase the efficiency of trading. Besides, the Chaos Signal indicator is not redrawn, which is certainly one of its advantages. His algorithm is based on mathematical calculations.
Settings and parameters
Industrial order of the indicator in MT4 is standard. For those who don’t know him, I wrote the corresponding “cheat sheet”. On the chart Chaos Signal forms signals in the form of icons: circles and “palms”.
This analysis tool actually does not require any settings. For a trader, you can only change the design of icons. You can choose the color and size of circles and “palms”.
Trade order opening
Market entry is performed when the corresponding signals appear.
If the chart has a circle colored green, it means that the indicator recommends that the trader open a BUY order (buy).
If the chart has a circle colored red, it means that the indicator sends a signal to open a SELL (Sell) order.
“Palm” appears if the signal was formed at the local maximum/minimum. This information will be useful for determining the levels at which take-profit and stop-loss. can be placed
After the lack of redrawing, Chaos Signal has another important advantage over other technical market analysis tools. It consists in the fact that the indicator gives qualitative signals not only on the trend movement, but also in the periods of flute.
In principle, this indicator is enough to build your own trading system. But trading results can be improved by adding a filter to the TM. In this case, there will be less entries, but the percentage of profitable trades will increase. Stochastic or RSI can be used as a filter, for example. If Chaos Signal recommends selling and the stochastic is in an area called “overbought”, you can trust this signal more. In turn, if the indicator recommends to buy, and the stochastic indicates “oversold”, this fact also strengthens the signal.
There are no restrictions on trading instruments and timeframes. But there is one important requirement. The work of the indicator should be checked in demo trading. You may only switch to a real account if you have verified the efficiency of this analysis tool yourself.Chaos Signal indicator can be downloaded here:Chaos_SignalFyodorov’s Inga31.10.2018