Hooded Trader Indicator has been designed with an aim to bring simplicity in daily trading life, especially for the short-term traders. It uses only a separate oscillator window to demonstrate the trend-based trade signals which can be read by the traders with any level of trading experiences.
The Indicator works great on major currency pairs like EURUSD, GBPUSD, AUDUSD, USDJPY, etc. As a scalping indicator, this tool suits best with shorter timeframe charts like M1 to M15 within the MT4 forex trading platform.
Hooded Trader Indicator: Explanation
After the installation at MT4 terminal, the indicator appears as the following image:
Hooded Trader Indicator applies a 20-day period average DAX slope which determines the trend levels. The indicator value drops below the average line and turns red means the trend has turned into bullish. For a bearish trend confirmation, the indicator value must be risen above the average line and turned into blue. Please see the example below:
Trades can be triggered once a trend is confirmed by the indicator. Usually, short-term trading indicators react faster than long-term trading indicators. Hooded Trader Indicator is a bit exceptional in this case. It works a bit slower than it supposed to be but offers trade signals with better confirmations and greater probabilities of success.
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Hooded Trader Indicator: Trading Rules
- Hooded Trader Indicator value drops below the average line and turns into red color
- A bullish price bar forms at the same time
- Buy at the break of the respective bar’s high
- Set stop loss below the nearest swing low of the market
- Exit long or take profit whenever the indicator value turns above the average line
- Hooded Trader Indicator value moves above the average line and turns into blue color
- A bearish price bar forms at the same time
- Sell at the break of the respective bar’s low
- Set stop loss above the nearest swing high of the market
- Exit short or take profit whenever the indicator value turns below the average line