Volatility Adjusted RSI Metatrader 5 Forex Indicator
The Volatility Adjusted RSI Metatrader 5 forex indicator is by definition, a member of the momentum indicator family.
Bearing in mind that our regular RSI indicator is handicapped when having to adjust itself to market volatility (more false signals), the Volatility Adjusted RSI MT5 forex indicator is able to do this by deploying a simple volatility component to adjust the RSI calculation period.
The indicator pops up in a separate window within the activity chart, as a colored buy/sell line that alternates between deep pink and green, based on the prevalent market trend.
The indicator can be used successfully as a scalping tool in combination with a trend following indicator.
Overall trend up? Open scalp trade when the line changes color from pink to green.
Overall trend down? Open scalp trade when the line changes color from green to red.
The EUR/USD H1 chart below displays the Volatility adjusted RSI Metatrader 5 forex indicator in action.
Basic Trading Signals
Buy Signal: Go long when the colored line of the Volatility Adjusted RSI Metatrader 5 forex indicator turns green.
Sell Signal: Go short when the colored line of the Volatility Adjusted RSI Metatrader 5 forex indicator turns deep pink.
Exit buy trade: Close all buy orders if while a bullish trend is ongoing, the line of the indicator turns deep pink.
Exit sell trade: Close all sell orders if while a bearish trend is ongoing, the line of the indicator turns green.
Tips: In order to filter out the countless noises emanating from the use of Volatility Adjusted RSI indicator owing to its erratic market behavior, it should be used in combination with trend confirming tools like the moving averages.
For instance, the 200 period simple moving average would fit in this case.
MT5 Indicator Characteristics
Currency pairs: Any
Platform: Metatrader 5
Type: chart window indicator
Customization options: Variable [RSI period, Volatility period (<=0 for same as RSI period), Price], Colors, width & Style.
Time frames: 1-Minute, 5-Minutes, 15-Minutes, 30-Minutes, 1-Hour, 4-Hours, 1-Day, 1-Week, 1-Month
Type: volatility | oscillator
Copy and paste the Volatility adjusted RSI.ex5 indicator into the MQL5 indicators folder of the Metatrader 5 trading platform.
You can access this folder from the top menu as follows:
File > Open Data Folder > MQL5 > Indicators (paste here)