CHT Value Chart Indicator

The CHT Value Chart Indicator is a technical tool used by traders for analyzing charts and confirming trade entries and exits. It indicates overbought and oversold levels and is beneficial for both novice and advanced forex traders. This could be worth adding to your collection of trading tools.

What is the CHT Value Chart Indicator?

As a separate indicator window, the CHT Value Chart Indicator displays an additional value chart. Green and red candles are plotted, as well as oversold and overbought levels. As a result, forex traders can predict price reversals if the value chart reaches oversold or overbought levels. Traders may be able to discover ideal entry points for their trades. The indicator is suitable for both novice and experienced forex traders. New traders, on the one hand, could comprehend the oversold and overbought trading tactics, as well as use price action to confirm trading signals. Advanced forex traders, on the other hand, can utilize the signal in conjunction with other indicators and incorporate them into complicated trading strategies. The indicator works on all intraday price charts as well as daily, weekly, and monthly charts.

Setting up the CHT Value Chart Indicator
Setting up the CHT Value Chart Indicator

CHT Value Chart Strategy

The CHT Value Chart Indicator is an easy-to-understand trading tool. Bearish candles are plotted as red, whereas bullish candles are plotted as green. Furthermore, the overbought level is shown in green, while the oversold level is shown in red. If the candles on the value chart cross the green oversold line, it signals that a trend reversal is on the way. As a result, forex traders might join the market with a buy trade and set a stop loss lower than the previous swing low. Similarly, traders can expect a negative trend if the candles in the value chart cross the overbought line. As a result, traders might enter a sell position with a stop loss above the previous swing high. There is no profit target provided by the indicator. As a result, traders could book profits with a favorable risk-reward ratio. Because the indicator only shows overbought and oversold levels, it predicts a trend reversal. As a result, traders may want to confirm entry locations with price action or any other forex indicator.

Buy Signal

The following could be your checklist for a buy trade:

  • When the indicator candle touches the green line below.
  • When the indicator forms a green candle.

Once these events occur:

  • You could open a buy position after you confirm your entry with bullish candlestick patterns.
  • You could set your stop loss just below the nearest swing low.
  • You could set your take profit at the nearest resistance zone, or you could exit trade when the indicator touches the red line above.
  • For good risk management, I would only consider trades with a risk to reward ratio of at least 1:2.
CHT Value Chart Indicator Buy Setup
CHT Value Chart Indicator Buy Setup

Sell Signal

The following could be your checklist for a sell trade:

  • When the indicator candle touches the red line above.
  • When the indicator forms a red candle.

Once these events occur:

  • You could open a sell position after you confirm your entry with bearish candlestick patterns.
  • You could set your stop loss just above the nearest swing high.
  • You could set your take profit at the nearest support zone, or you could exit trade when the indicator touches the green line below.
  • For good risk management, I would only consider trades with a risk to reward ratio of at least 1:2.
CHT Value Chart Indicator Sell Setup
CHT Value Chart Indicator Sell Setup

CHT Value Chart Pros & Cons

Pros

  • The CHT Value Chart Indicator informs the traders on potential trend reversal zones.
  • This indicator also tells the traders where overbought and oversold levels are on their charts.

Cons

  • The CHT Value Chart Indicator does not provide specific profit targets.
  • The overbought and oversold levels sometimes may not eventually lead to an immediate trend reversal.

Conclusion

The CHT Value Chart Indicator is an oscillator with overbought and oversold values. While forex traders can use overbought and oversold levels to trade in the same way as other technical indicators, the signals should be confirmed using price action or other indicators. This is a nice tool worth adding to your trading arsenal; however, it is necessary to pay attention to money management and understand that no indicator is 100% accurate.

Free Forex Robot