How to Add Stochastic Momentum Index Indicator on MetaTrader 4 Charts - Adding MT4 SMI Indicator
Step 1: Open Navigator Window on Software
Open Navigator panel as shown & illustrated below: Go to 'View' menu (click on it), then select 'Navigator' panel (click), or From Standard Tool-Bar click the 'Navigator' button or press keyboard shortcut keys 'Ctrl+N'
On Navigator panel, choose 'Indicators', (DoubleClick)
How to Add Stochastic Momentum Index Indicator on MetaTrader 4 - MT4 Stochastic Momentum Index Indicator
Step 2: Expand the Indicators Menu on the Navigator - Adding Stochastic Momentum Index MT4 Indicator
Expand the menu by clicking the expand button marker (+) or double click the 'indicators' menu, after this the button will appear as (-) and will now display a list as shown below - select the Stochastic Momentum Index chart indicator from this list of indicators so as to add the Stochastic Momentum Index indicator on the chart.
How to Add Stochastic Momentum Index Indicator - From the Above window you can then place Stochastic Momentum Index indicator that you want on the Forex chart
How to Add Custom Stochastic Momentum Index Indicator to MetaTrader 4
If the indicator you want to add is a custom indicator - for example if the Stochastic Momentum Index indicator you want to add is a custom indicator you will need to first add this custom Stochastic Momentum Index indicator on the MT4 platform & then compile custom Stochastic Momentum Index indicator so that the newly added Stochastic Momentum Index custom indicator pops up on the list of custom indicators on MT4 software.
To learn how to install Stochastic Momentum Index indicators on MT4, how to add Stochastic Momentum Index indicator window to MT4 and how to add Stochastic Momentum Index custom indicator in MT4 - How to add a custom Stochastic Momentum Index indicator in MT4.
About Stochastic Momentum Index Indicator Tutorial PDF
SMI Technical Analysis Signals
Developed by William Blau.
Stochastic Momentum Index, SMI indicator is an adaptation of the classic Stochastic Oscillator indicator that smoothes out the stochastic oscillations.
Construction of Stochastic Momentum Index Indicator
This indicator is calculated by comparing the currency price relative to the average of an n number of periods.
Then instead of drawing these values directly, smoothing using an Exponential MA is applied & then the values plotted to form the SMI.
When the closing price is greater than the average of the range, the SMI will move upward.
When the closing price is less than the average of the range, the SMI will move downwards.
This oscillator ranges between the values of +100 & -100, this technical indicator is also less prone to fake outs compared to the stochastic oscillator.
Forex Analysis & How to Generate Signals
Buy & Sell Signals/ FX Crossover Signals
The SMI can be used to generate buy & sell signals using the method illustrated below, Buy when the SMI is moving upwards & sell when its moving downwards.
Buy and Sell Signals/ Forex Cross over Signals
Overbought/Oversold Level Forex Cross overs
- Overbought levels above +40
- Oversold levels below -40
Buy signal is generated when this oscillator falls below oversold level & then rises above this level & starts to move upwards.
Sell Signal is generated when this oscillator rises above overbought level and then falls below this level & starts to move downwards.
Divergence Forex Trading
The example below shows a bearish classic divergence between the price & the SMI. When the Stochastic Momentum Index showed this divergence the price trend reversed and started to move in a downward direction.
Bearish Trade Divergence Setup
