Bounce Strength Forex Trading Indicator
The bounce strength indicator is an indicator for MetaTrader 4 that is also tagged BSI. The indicator displays the authority of bounce in accordance with the Wyckoff technique, which is basically hinged on two rules, the first being that no one should expect the market to behave exactly the same way twice, while the second explains current market behavior as being noteworthy only when matched to what they market did in the past.
The bounce strength indicator indicator also uses volume to determine the power of the bounce.
How to gauge the power of bounce?
Strength of bounce up from lows:
(shut – low ) * (ceiling – low) / vary unfold
Strength of bounce down from highs:
(excessive – shut) * (excessive – flooring) / vary unfold
The calculations shouldn’t bother us that much but knowing that the bigger the surge from the decrease place, the stronger the hunger for strain. The larger the fall from the higher place, the stronger the supporting stress. This is a straightforward, but can still turnout to be a preferred indicator when considering breakout.
Minus Histogram – a minus histogram connotes the bounce power down from peaks;
Plus Histogram – a plus histogram describes a bounce power up from troughs;
Center Line – The center line distinguishes the plus/minus.
The bounce strength indicator fluctuates between “10” and “-10” values and as such the market is said to be overbought if the black line and blue histogram breaks above the “10” level. Traders will enter a sell position if the black line of the indicator begins to drop from the “10” level.
The market is said to be oversold if the black line and the red histogram breaks below the “-10” level – a buy signal is in place when price recovers upward from this zone.
MT4 Indicator Characteristics
Currency pairs: Any
Platform: Metatrader 4
Type: chart window indicator
Customization options: Variable (Range Period, Slowing, Avg Period, Using TickVolume), Colors, width & Style.
Time frames: 5-Minutes, 15-Minutes, 30-Minutes, 1-Hour, 4-Hours, 1-Day, 1-Week