Many traders overlook certain technical indicators that can help identify potential entry and exit points in the forex market. This guide covers three indicators—ATR, Buy Sell Wait, and Volume Flow Index—along with specific rules for reading their signals and managing trades.
Key takeaways
- ATR indicator uses green and red lines to signal potential buy and sell entries
- Buy Sell Wait indicator shows arrows pointing up for buys and down for sells
- Volume Flow Index crosses above or below the zero level line to indicate trade direction
- All three strategies use a one-to-one risk-reward ratio for target setting
- Stop losses are placed at the middle ATR line, previous highs, or previous lows depending on the indicator
Strategy One: ATR Indicator
The first strategy uses the ATR (Average True Range) indicator with color-coded lines. When the market crosses the green ATR line moving upward, this signals a potential buy entry. The buy is confirmed at the crossover point.
For a sell signal, watch for the market to cross the red ATR line moving downward. The sell entry is taken at this confirmation point.
The stop loss for both buy and sell trades is placed at the middle ATR line. The profit target is set at a one-to-one ratio, meaning the distance to the target equals the distance to the stop loss.
Strategy Two: Buy Sell Wait Indicator
The second strategy requires the Buy Sell Wait indicator with modified settings. This indicator displays arrows to signal potential entries.
When the Buy Sell Wait indicator shows a red arrow pointing downward, this signals a potential sell trade. The sell entry is placed at the point of signal confirmation.
For buy signals, look for a green arrow pointing upward. The buy trade is entered when this signal appears. Stop losses are set at the previous high point for sell trades and the previous low point for buy trades. The profit target remains at a one-to-one ratio.
Strategy Three: Volume Flow Index Indicator
The third strategy uses the Volume Flow Index indicator, which displays color-coded clouds relative to a zero level line.
A buy signal occurs when the green cloud of the Volume Flow Index crosses the zero level line moving upward. The buy trade is entered at this confirmation point, with the stop loss placed at the previous low point.
For sell signals, watch for the red cloud to cross the zero level line moving downward. Enter the sell trade at the signal confirmation, placing the stop loss at the previous high point. Like the other strategies, the profit target is set at a one-to-one ratio.
Common Elements Across All Three Strategies
All three indicator strategies share certain characteristics. Each uses visual signals—whether colored lines, arrows, or clouds—to indicate potential trade direction.
The risk-reward approach is consistent across all methods, with profit targets set at a one-to-one ratio. This means if your stop loss is 20 pips away, your take profit would also be 20 pips away.
Stop loss placement varies by strategy but follows logical reference points: either indicator-specific levels like the middle ATR line, or price structure points like previous highs and lows.
Reading Indicator Signals
Each indicator has specific signal rules that traders should follow. For the ATR strategy, the key is watching which colored line the price crosses and in which direction.
The Buy Sell Wait indicator relies on arrow direction and color. Red arrows pointing down suggest selling opportunities, while green arrows pointing up suggest buying opportunities.
The Volume Flow Index requires attention to both the cloud color and its position relative to the zero line. The signal is valid only when the cloud crosses this reference level in the appropriate direction.
Frequently asked questions
Where do I place the stop loss when using the ATR indicator strategy?
When using the ATR indicator strategy, place the stop loss at the middle ATR line for both buy and sell trades.
What is the profit target ratio for these indicator strategies?
All three strategies use a one-to-one profit target ratio, meaning the distance to your take profit equals the distance to your stop loss.
How does the Volume Flow Index indicate a buy signal?
The Volume Flow Index gives a buy signal when the green cloud crosses the zero level line moving upward. The stop loss is then placed at the previous low point.
What color arrow signals a sell trade with the Buy Sell Wait indicator?
A red arrow pointing downward on the Buy Sell Wait indicator signals a potential sell trade, with the stop loss placed at the previous high point.
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Full video transcript
Welcome back, traders. Today, I'm going to show you top three most powerful indicators. >> This strategy we need indicator. If market cross green ATR line upward, then we take a buy trade. Here is buy signal confirmation.
We place buy trade here. Stop loss middle ATR line. Set profit target one is to one. We won this trade. If market cross red ATR line downward, then we take a sell trade.
Here is a sell signal confirmation. We place sell trade here. Stop loss middle ATR line. Set profit target one is to one. We won this trade.
This strategy, we need buy sell weight indicator. >> [music] >> With change some settings. If buy sell weight indicator signal red arrow downward, then we take a sell trade. >> [music] [music] >> Here a sell signal confirmation. We take a sell trade here.
>> [music] >> Set stop loss previous high point. Set profit target one is to one. >> [music] >> We won this trade. If buy sell weight indicator signal green arrow upward, then we take a buy trade. >> Here is buy signal confirmation.
We take a buy trade here. Set stop loss indicator previous low point. Set profit target one is to one. We won this [music] trade. This strategy we need volume flow index indicator.
If volume flow index indicator green cloud cross zero level line upward, then we take a buy trade. Here is buy signal confirmation. We take a buy trade here. Set stop loss previous low point. Set profit target one is to one.
We won this trade. If volume flow index indicator red cloud cross zero level line downward, then we take a sell trade. Here is sell signal confirmation. We take a sell trade here. Set stop loss previous high point.
Set profit target one is to one. We won this trade. >> Here is buy signal confirmation. We take a buy trade here. Set stop loss previous low point.
Set [music] profit target one is to one. We won this trade.
