The CHO indicator for MT5 provides Forex trend reversal signals. CHO – Chaikin Oscillator calculates these signals using the impulse ADL – Accumulation Distribution Lines. However, ADL is based on the average price, closing price and volume of the candle. Thus, the CHO oscillator is actually an ADL oscillator.
The indicator is easy to interpret and works well for both new and experienced Forex traders.
Moreover, it works on all chart timeframes and is suitable for short-term and long-term trading. However, this may not provide the best trading results for scalpers.
CHO Indicator For MT5 Trading Signals
The indicator displays the blue oscillator line in a separate indicator window. Oscillator values above the zero line indicate a bullish trend. Conversely, a bearish trend reversal occurs when oscillator values fall below the zero line. So, the best trading strategy is to enter the markets based on the intersection of the zero line and the oscillator line.
Because oscillators tend to provide the best Forex reversal trading signals based on convergence and divergence. Another trading strategy is to buy and sell at the moment of convergence and divergence between the price and the oscillator line.
The ADL – Accumulation and Distribution line calculates values using volume as an integral component. Most oscillators do not use volume; this makes the Chaikin Oscillator an excellent candidate for technical analysis. Although ADL calculates volumes, a falling CHO oscillator line indicates falling trading volumes and vice versa. Essentially, CHO reflects the accumulation and distribution phases of the market using ADL values.
Setting
SlowPeriod:, FastPeriod:, TypeSmooth: Input for oscillator calculation.
Conclusion
Thus, the CHO indicator for MT5 detects Forex trend reversals using ADL. However, traders should note that for best results, traders should enter the market at the same time as other technical indicators.
