The ChandeQStik_v1 indicator for MetaTrader4 was designed by Tushar Chande in a bid to define the strength and weakness of a security over ‘n’ period of time. The Qstick indicator typifies the moving average of the difference between the security’s opening and closing price.
If the value of the Qstick indicator is positive it denotes the asset has enjoyed more net points up over “n” period, whereas a negative Qstick indicator value denotes the asset has enjoyed more net points down over “n” period.
If a currency pair is up 25 pips in a day, but dips a total of 8 pips the other 9 days, the currency pair will have a positive Qstick value. A simple principle is to buy when the Qstick oscillates above the 0 level and sell when the Qstick oscillates below the 0 level.
This trading method should be employed in sideways markets, since the fx pair is most likely to stick to support and resistance level.
Another information that can be derived from the Qstick indicator is the extreme readings that usually denotes market tops and bottoms. Although, there are not upper or lower signal lines, traders will have to compare past tops and bottoms in the Qstick indicator when moving against spontaneous moves.
Traders can also trade divergences between the price of the pair and the Qstick indicator. This mean entering a buy if the value of the Qstick indicator is surging while price is dipping lower, or going bearish if the value of the Qstick is dipping while price is aiming higher.
MT4 Indicator Characteristics
Currency pairs: Any
Platform: Metatrader 4
Type: chart window indicator
Customization options: Variable (Length, MA_Mode), Colors, width & Style.
Time frames: 5-Minutes, 15-Minutes, 30-Minutes, 1-Hour, 4-Hours, 1-Day, 1-Week, 1-Month
Type: oscillator, divergences