What is the Cycle Identifier Indicator?
The Cycle Identifier Indicator is a trading tool that allows you to understand the right time to place buy positions or sell positions. This indicator consists of RSI, SMA, and a price action filter that combines to deliver accurate forex signals to aid in your forex trading strategies.
The Cycle Identifier Indicator is not built-in on the MT4 platform. However, you can download it on the MT4 marketplace and attach it to your MT4 account. Although this indicator is easy to understand, it is known to be repainting which decreases its accuracy and reliability.
How to Trade the Cycle Identifier Indicator?
The Cycle Identifier Indicator is one of the easiest tools to understand when it comes to forex trading. The indicator does not appear on the actual market chart and actually forms underneath it, just like the RSI indicator. This makes it easier to understand both the chart and the indicator.
The base value in this indicator is 0.0, and it gives signals both above and below the base value. You will notice lighter color lines and darker color lines. The darker color lines indicate that the signal is more accurate or strong with a higher chance of becoming successful.
It is important to note that since this indicator is known to be repainting, you should only watch out for the most recent signals in your forex strategy. This is not an indicator that you want to use for long-term strategies as its historical data is not the most reliable you will find.
Cycle Identifier Indicator Buy Signal
In order to identify a buy signal from the cycle identifier indicator, you must look for the green line formation at the bottom of the chart. Lines that appear under the 0.0 base will appear as a green color, and they signify that the market is going to be bullish. We recommend watching out for the dark green line as that reveals a higher level of accuracy for the buy signal.
Cycle Identifier Indicator Sell Signal
In order to identify a sell signal from the cycle identifier indicator, you must look for the red line formation at the bottom of the chart. Lines that appear above the 0.0 base will appear as a red color, and they signify that the market is going to be bearish. We recommend watching out for the dark red line as that reveals a higher level of accuracy for the sell signal.
Cycle Identifier Indicator Pros & Cons
The cycle identifier indicator is a popular indicator to use in forex trading. Here are its pros and cons:
Pros
- Determines support and resistance levels
- Easy to understand for beginners
- Can be customized in the settings
Cons
- The indicator is known to be repainting
- Only accurate on shorter timeframes
- Not reliable in a volatile market
- Not built-in on the MT4 platform
Conclusion
The cycle identifier indicator combines SMA, RSI, and a price action filter to deliver accurate buy and sell signals for your forex trading strategy. This indicator needs to be downloaded on MT4 and is known to be repainting but it can still be accurate on shorter timeframes provided you take time to filter the signals.
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