The Color MA RSI Trigger indicator is a MetaTrader 5 (MT5) indicator that combines moving averages and relative strength index (RSI) to determine optimal trading settings. It identifies trend direction and potential market reversal zones to help traders make informed decisions.
The indicator’s moving averages smooth out price to determine the underlying market trend, while RSI measures recent price changes to detect overbought and oversold areas. In addition, the RSI fluctuates between the -1 and +1 zones, which represent oversold and overbought levels, respectively.
Thus, the indicator signals bullish/bearish market conditions when the RSI crosses above/below the zero centerline. On the other hand, a potential trend reversal occurs when the RSI touches the +1 or -1 zones.
How to Use the Color MA RSI Trigger Indicator
The image below shows the trend direction and reversal zones identified by the Color MA RSI Trigger indicator.
The indicator is ideal for scalping and day/intraday trading. Therefore, you can look for short-term buying or selling opportunities when the RSI crosses above or below the zero centerline. For example, consider opening a buy position when the indicator draws a blue box and when price forms a bullish engulfing candle, pin bar, etc.
Conversely, you can determine trend reversal settings in the indicator’s overbought and oversold zones in combination with price/action/other indicators. For example, you may consider selling an asset if the indicator draws a pink rectangle and the price has also formed a double top, bearish engulfing candle, etc.
Setting
The indicator comes with the following settings:
nPeriodsRsi: Determines the period of the RSI.
nPeriodRsiLong: Determines the value of the center line and the overbought/oversold zones of the RSI.
nPeriodMa: Determines the period of the moving average.
nPeriodMaLong: Determines the value of the center line and the overbought/oversold zones of the moving averages.
SetPorog: This parameter does not have a notable impact on the indicator.
Conclusion
The Color MA RSI Trigger Indicator for MT5 is an optimized trend direction and trend reversal indicator suitable for beginners and experienced traders. However, traders should consider using it as a confluence with price action/other trading indicators to mitigate false signals.
