Introduction to the Bounce Strength Indicator
The Bounce Strength Indicator is a forex technical analysis tool that shows the strength of a market bounce.
The indicator is located in a separate window placed just below the main trading chart.
The strength of the buyers and sellers in the market is displayed in the form of histogram bars.
When the blue bars in the histogram spikes are higher than the red ones, you can consider the bulls are currently dominating the market. Similarly, when the red bars in the histogram spikes are lower than the blue ones, you can consider the bears are currently dominating the market.
In other words, pay attention to the size and direction of these spikes. To make readings easier, the upper range for the histogram is marked with a 10 level, and the lower range is marked with a negative 10 level.
Be extra careful, when there are big spikes in both directions. It reflects market indecision.
We suggest to use it as a filter for opening and exiting transactions. Go ahead and add it to your best trading system.
It fits all kinds of timeframes and currency pairs.
The default indicator settings can be modified directly from the input tab. Feel free to experiment with the settings and parameters to fit your personal preferences.
How to set up the Bounce Strength indicator in MT4?
Copy and paste the bounce-strength-indicator.mq4 or bounce-strength-indicator.ex4 indicator files into the MQL4 folder of the Metatrader 4 trading platform.
You can gain access to this folder by clicking the top menu options, that goes as follows:
File > Open Data Folder > MQL4 > Indicators (paste here).
Now go to the left side of your MT4 terminal. In the Navigator find the gauge name, right-click it and select Attach to the chart.
Click the link below:
The Bounce Strength indicator is well worth adding to your trading collection but remember about having realistic expectations. Just like any other technical analysis tool, is not capable of providing accurate signals 100% of the time. Thus, it will provide false signals occasionally. Its performance will vary significantly depending on market conditions. Feel free to develop your own trading system based around it.