Introduction to the Predict Indicator
One of the most common types of indicator that new traders would want to find is an indicator that produces reliable trade signals.
The Predict Indicator is one of the many trade direction signal indicators that traders can use. It can be an effective signal indicator when used in confluence with other technical indications.
What is the Predict Indicator?
The Predict Indicator is a momentum following signal indicator which provides momentum reversal trade signals, as well as indications of flat market conditions.
This indicator is plots diamond symbols to indicate a trade signal. It plots lime diamond symbols to indicate a long or buy trade signal and magenta diamond symbols to indicate a short or sell trade signal. It also identifies and indicates flat markets by plotting a blue dot symbol.
Traders can use these symbols as trade entry signals based on momentum. However, it should be used in confluence with other technical indicators as part of a trading strategy.
These symbols can also be used as a trade direction indication wherein traders would trade only in the direction indicated by the Predict Indicator. However, traders should find trade setups on the lower timeframes which agree with the Predict Indicator trade direction.
How the Predict Indicator Works?
The Predict Indicator uses a complex algorithm which compares the closing price with average range of price action.
First, it identifies the average close price on a two period range, and the average close price of a five period range. It then divides the difference between the two by the current close price multiplied by a series of variables.
Its complex algorithm has several more steps using this formula which it uses to identify the momentum direction.
How to use the Predict Indicator for MT5
The Predict Indicator has a couple of variables which can be modified within its indicator settings.
The “Buy Level” and “Sell Level” variables are the modifiable variables which are included in its formula. Traders can adjust these values to modify the sensitivity of the Predict Indicator signals.
Buy Trade Setup
When to Enter?
Open a buy order as soon as the Predict Indicator plots a lime diamond symbol below a price candle in confluence with other technical indications.
When to Exit?
Close the trade as soon as the Predict Indicator plots either a blue dot or magenta diamond symbol above a candle.
Sell Trade Setup
When to Enter?
Open a sell order as soon as the Predict Indicator plots a magenta diamond symbol above a price candle in confluence with other technical indications.
When to Exit?
Close the trade as soon as the Predict Indicator plots either a blue dot or lime diamond symbol below a candle.
Conclusion
The Predict Indicator signals are not always very accurate. There would be trade signals that do not result in price moving in the direction indicated by the Predict Indicator symbols. However, it can still be a useable trading signals whenever it is traded in confluence with other technical indications such as trend direction or reversals on a clear support or resistance level.
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