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Fisher and Stochastics MT5 Forex Trading Indicator

Amandeep Sonewane | Aug. 14, 2019
Fisher and Stochastics MT5 Forex Trading Indicator

Fisher and Stochastics MT5 Forex Trading Indicator is a combination of two indicators plus the template. The Fisher indicator is a custom indicator which oscillates around a zero line, presented as a histogram. This conveniently provides a buy or sell signal. Histograms with lime color indicate that the trend’s bias is bullish, while histograms with red color indicate the trend’s bias is bearish.

The Fisher indicator on its own is good. However, it is best to use it in combination with other indicators or strategies. That's the reason the combination of Fisher MT5 indicator works out well with Stochastic for MT5. Stochastic indicators are one of the more popular indicators in trading.

One of the advantages of the stochastic indicator is its ability to react quickly with what price is doing. This allows the trader to see minor swings, which scalpers love to take profit from. Another feature that the stochastic indicator has is its overbought and oversold levels. If the indicator is above 80, the market is considered overbought. If the indicator is below 20, then the market is considered oversold.

How to trade with Fisher and Stochastics MT5 Forex Trading Indicator?

The Buy Setup – Entries, Stop Losses & Take Profits

Tying it all up together, we will be combining the Fisher indicator and the stochastic indicator.

To enter the market for a buy setup, these two rules must be met.

  1. The Fisher indicator should be plotting lime histograms indicating that the market’s bias is bullish.
  2. The stochastic indicator should be crossing the 20-line from the oversold area.

The stop loss should be placed just a few pips below the latest minor swing low. Often, due to the stochastic indicator’s responsiveness, the swing low would also be the entry candle itself.

If for some reason, the trend reverses causing the Fisher indicator to plot bearish histograms, then the trade should be manually closed, whether in profit or at a loss.

Since this is a scalping strategy, we will be a bit more conservative with our take profits. We will be using a 2:1 risk-reward ratio as our target take profit. This increases the probability that the take profit would be hit more often and still give us a profit that is twice our risk.

The Sell Setup – Entries, Stop Losses & Take Profits

As for the sell setup, the following rules should be checked to trigger a sell trade:

  1. The Fisher indicator should be plotting red histograms indicating that the market/s bias is bearish.
  2. The stochastic indicator should be crossing the 80-line from the overbought area.

The stop loss should be placed just a few pips above the most recent swing high.

If in case the market’s bias shifts causing the Fisher indicator to plot bullish histograms, then the trade should also be manually closed.

Still, for the take profits, we will be setting a 2:1 risk-reward ratio as a basis for our target take profits.

On the chart below, three trades could have been taken in a span of 8 hours on the 5-minute chart.

How to download and install an indicator?

In order to install the indicator on your MT5 platform, you need to follow these steps:

  1. Click on “Download Indicator” button located at the top right corner of the screen.
  2. Save the file to your computer.
  3. Extract and move the files into MT5>Indicator folder of the MetaTrader5 software file directory.
  4. Restart your Metatrader platform.
  5. Navigate to “Indicators.”
  6. And select “Fisher and Stochastics MT5 Forex Trading Indicator” template to apply it on the chart.

Note: This indicator was developed by Jack. AtoZ Markets does not carry any copyrights over this trading tool.

Disclaimer: The views and opinions expressed in this article are solely those of the author and do not reflect the official policy or position of AtoZ Markets.com, nor should they be attributed to AtoZMarkets.