How Do You Use Stochastic Momentum Index MetaTrader 4 Indicator?
Stochastic Momentum Index Indicator Technical Analysis & SMI Buy & Sell Signals
Developed by William Blau.
The Stochastic Momentum Index, SMI indicator is an adaptation of the classic Stochastic Oscillator indicator that smoothes out the stochastic indicator oscillations.
How to Add MetaTrader 4 Stochastic Momentum Index Indicator on MetaTrader 4 Charts
Construction of Stochastic Momentum Index Indicator
SMI indicator is calculated by comparing the forex price relative to the average of an n number of forex price periods.
Then instead of drawing these values directly, a smoothing using an Exponential Moving Average is then applied to the values and the values are then drawn to form the SMI indicator.
When the closing forex price is greater than the average of the forex price range, the SMI indicator will move up.
When the closing forex price is less than the average of the forex price range, the SMI indicator will move down.
SMI indicator oscillator ranges between values of +100 and -100, this SMI indicator is also less prone to forex whipsaw signals compared to the stochastic oscillator forex indicator.
How to Generate Buy and Sell Signals
Buy and Sell Signals
The Stochastic Momentum Index indicator can be used to generate buy and forex sell trading signals using the forex technical analysis method shown below - Buy forex trading signal is when the SMI indicator is heading upward - Sell forex trading signal is when the SMI indicator is heading downward.
Overbought and Oversold Levels FX Trading Crossovers
- Overbought levels is SMI indicator values above +40
- Oversold levels is SMI indicator values below -40
Buy forex trading signal is generated when SMI indicator oscillator falls below the oversold levels and then rises above these oversold levels and starts moving upward.
Sell forex trading signal is generated when SMI indicator oscillator rises above the overbought levels and then falls below these overbought levels and starts moving downward.
Divergence Forex Trading
The SMI indicator example below shows a bearish classic divergence trading setup between the forex price & the SMI indicator. When the Stochastic Momentum Index indicator showed this divergence forex trading signal the forex price trend reversed and started moving in a downward direction.
Bearish Divergence Stochastic Momentum Index Technical Indicator
How to Add MetaTrader 4 Stochastic Momentum Index Indicator in MetaTrader 4 Charts
Step 1: Open MetaTrader 4 Software Navigator Window Panel
Open MT4 Navigator window as shown below: Go to "View" menu (click), then select "Navigator" window (click), or From Standard Tool Bar click the "Navigator" button or press keyboard MetaTrader 4 shortcut keys "Ctrl+N"
On MT4 Navigator window, select "Indicators", by Double Clicking
How Do You Use MetaTrader 4 Stochastic Momentum Index Technical Indicator?
How to Add Stochastic Momentum Index MetaTrader 4 Indicator
Expand the menu by clicking the expand button (+) or double click the "indicators" menu, after this the button will appear as (-) and it will then display a list of MetaTrader 4 indicators as shown below - choose the Stochastic Momentum Index technical indicator from this list of MetaTrader 4 indicators so that you can add the Stochastic Momentum Index MetaTrader 4 indicator on the MetaTrader 4 forex chart.
How Do You Use MetaTrader 4 Stochastic Momentum Index Technical Indicator?
How to Install and Place Custom Stochastic Momentum Index Indicator MT4
If the MetaTrader 4 indicator that you want to add on the MetaTrader 4 charts is a custom MT4 indicator - for example if the Stochastic Momentum Index indicator that you want to add is a custom MetaTrader 4 indicator you will need to first add this custom Stochastic Momentum Index MetaTrader 4 indicator on the MetaTrader 4 platform and then compile this custom Stochastic Momentum Index technical indicator so that this newly added Stochastic Momentum Index MetaTrader 4 forex custom indicator appears on the custom technical indicators list on the MetaTrader 4 software.
To learn how to add Stochastic Momentum Index indicators on MT4 platform - how do you add Stochastic Momentum Index indicator window to MT4 platform? - how do you add Stochastic Momentum Index forex custom indicator on MT4 platform? - How to add a custom Stochastic Momentum Index custom forex indicator on MetaTrader 4.
How Do You Use MetaTrader 4 Stochastic Momentum Index Technical Indicator?
