Double Smoothed Stochastic Indicator
Platform: MT5 Type: Oscillator Last update: January 27, 2025The Double Smoothed Stochastic Indicator for MT5 aims to generate (as the name suggests) more reliable and less volatile signals. In fact, it’s based on a formula that involves exponential moving average (EMA).
What’s more, the smoothing methods additionally available are SMA, SMMA, and LWMA. All these combinations result in a less nervous stochastic line, and it can be easily observed. The double smoothing process helps to filter out market noise well.
Example chart:
How to use the double smoothed stochastic mt5 indicator in trading?
While the traditional approach involves using 30 and 70 levels for oversold and overbought states, this indicator uses 20 and 80 values. When it reaches the overbought area, the area gets colorized in green. Similarly, in the case of the oversold zone, it’s defined with orange color.
This visual enhancement makes it easier for forex traders to identify potential upcoming reversals. Plus, the smoothed nature of this tool ensures that false signals are minimized.
Be cautius during strong trends
Another fact and observation is that during periods of strong trends, the readings can achieve extreme states for extended amout of time. This is why it’s a good idea to combine this indicator with other technical analysis tools, such as trendlines or volume indicators, to confirm signals and avoid false breakouts.
Few words about settings
Feel free to experiment with options available in the metatrader 5 settings. What’s amazing is that you can display all four methods at the very same time. It’s great to see differences and adjust it to trading strategy and currency pair.
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