extreme point is an index that helps to ascertain the points of possible cost reversal on the chart.
The index makes it easier to find points for much more precise entry into trades. The index shows certain impulses, after which there’s some high likelihood that the price will continue its motion in the exact same direction.
The indicator can be used along with other indicators to more accurately determine the entry points to a position. The indicator can also be used individually.
For example: the indicator can be used with the normal Moving Average with a span of 200 to determine the trend. According to this system, buy signals are considered when the price is above MA 200 (uptrend), and sell signals are ignored. Similarly, sell signals are considered when the price is below MA 200 (downtrend), and buy signals are ignored.
This indicator can work on any timeframe and any currency pair, but I recommend using a timeframe from M5 to W1 (from five-minute to weekly).
You can also use different timeframes at the same time to get a stronger signal or confirm the signal on other timeframes. The ideal situation is when you get a signal in the same direction on several timeframes, this signal is the strongest. And the potential profit from the transaction on such a signal increases.
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- Period 1 – the period used for calculating the indicator. Suitable values are from 1 to 30.
- Period 2 – the period used for calculating the indicator. Suitable values are from 1 to 20.
- Period 3 – the period used for calculating the indicator. Suitable values are from 1 to 10.