Delta Indicator for MT4

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Delta Indicator for MT4

Introduction to the Delta Indicator

Most oscillator lines are preset to indicate the short-term trend or momentum. Although most oscillators can be adjusted to support long-term trend indications, most were developed for the purpose of identifying the short-term and mid-term trend direction.

The Delta Indicator is quite the opposite. It is an oscillator which was developed with a preset to indicate the long-term trend direction.

What is the Delta Indicator?

The Delta Indicator is a trend following momentum oscillator which indicates the direction of the long-term trend.

This indicator plots two lines which oscillate freely on its own indicator window. It plots the faster oscillator line in red and the slower oscillator line in blue. Trend direction is indicated based on how the two lines stack up.

Delta Indicator for MT4

How the Delta Indicator Works?

The Delta Indicator uses a couple of underlying moving average lines within its script, particularly Exponential Moving Average (EMA) lines. It then converts the two underlying moving average lines into oscillators and plot the lines on its own indicator window. In a way, the two oscillator lines are derived from the two underlying EMA lines.

How to use the Delta Indicator for MT4

The Delta Indicator has several variables which traders can use to modify the sensitivity of the indicator.

The “sper” variable refers to the number of periods used on the underlying slower moving average line, while the “fper” variable refers to the number of periods used on the underlying faster moving average line.

How the Delta Indicator Works

The Delta Indicator can be used to objectively identify the long-term trend direction or bias. The market is in an uptrend whenever the red oscillator line is above the blue line. Inversely, the market is in a downtrend whenever the red line is below the blue line.

In relation to this, the Delta Indicator can also be used to identify long-term trend reversals. The crossing over of the red line and the blue line may be used as a long-term trend reversal signal. The crossing of the red line above the blue line indicates a potential bullish long-term trend reversal, while the inverse of this indicates a potential bearish long-term trend reversal.

Buy Trade Setup

When to Enter?

Open a buy order as soon as the red Delta Indicator line crosses above the blue line. Set the stop loss on the support below the entry candle.

When to Exit?

Close the trade as soon as the red line crosses below the blue line.

How to use the Delta Indicator for MT4 - Buy Trade

Sell Trade Setup

When to Enter?

Open a sell order as soon as the red Delta Indicator line crosses below the blue line. Set the stop loss on the resistance above the entry candle.

When to Exit?

Close the trade as soon as the red line crosses above the blue line.

How to use the Delta Indicator for MT4 - Sell Trade

Conclusion

The Delta Indicator is a very reliable long-term trend indicator. Most of the long-term trend reversal signals it produce do tend to be very accurate. It is not perfect, but it is relatively more accurate than other oscillators when identifying the long-term trend.

Although this indicator is a very promising long-term trend indicator, traders should still test it before using it on a live trading account.

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