Remember the XMR Indicator scanner? This uses the same RSI strategy except with a different look, and is incorporated in the package deal with the XMR Indicator. We thought it would be a good idea to provide another option for traders depending on what scanner they like better. Instead of bars reading -5 to +5, the Arrows Indicator places an arrow or an 'x' on a candle if prices look overbought or oversold.
How it works
This tool uses the same concept as the XMR Indicator by taking the average of five RSIs on the time periods of 4 days, 7 days, 14 days, 28 days and 50 days. However, this scanner will not notify the user if values are between -2 and +2 so it can only capture the more extreme XMR conditions. If the scanner calculates a +3 or -3 on a pair, the Arrows Indicator will place an arrow on that candle shown above. A blue arrow shows that the price is oversold, and a red arrow shows that the price is overbought.
If the scanner calculates a reading of +4 or higher/-4 or lower, it will place a red 'x' on top of the candle. The 'x' shows that prices are extremely overbought or oversold, and that it could be a good chance to long or short a pair.
Notice how a single arrow does not necessarily show a strong indication to buy or sell. However, a cluster of arrows/'x's usually show up before price shifts the other way. I think a good way to use this indicator is to wait for at least 2 arrows/'x's before it's time to enter.
I've noticed this on other time frames too.
Overall, this indicator tends to work better on time frames higher than 5 minutes and are most accurate on longer time frames like 4H to 1M since we're looking for extreme mean reversions. Like we said before, not every indicator is perfect, but the XMR package could be a great tool to have if you're unsure on whether or not a pair will continue its trend or reverse. We hope that these tools will be helpful in your trading career, and we are excited to release this product and hear your feedback.
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Please note that this email is my personal opinion only. I am not a licensed financial advisor, and any information shared or discussed is not to be construed as investment advice. Trading and investing involves a degree of risk, and is not suitable to all investors. Please consult with your financial advisor before making any sort of investment decisions.
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