DSS Bressert Indicator

Walter Bressert created the DSS Bressert indicator. It is smoother than a standard stochastic indicator, but it may be understood in the same way, with 30 being oversold and 70 being overbought. The computations begin with a standard raw stochastic. Before taking another raw stochastic of the outcome, this stochastic is smoothed by exponential moving averages. The second stochastic is then subjected to a second exponential moving average of the same period.

What is the DSS Bressert Indicator?

The DSS Bressert trading indicator is a method based on a modification of the basic Forex Stochastic Oscillator indicator, with double smoothing applied to the computations. The indicator may be used in trading for a variety of objectives, including assessing the current trend, its strength, finding a good time to join the market, and determining whether the market is overbought or oversold. It is shown in the lower pane of the price chart as two intersecting lines that move within the indicator’s signal levels. Taking the values of these lines into consideration, the current trend is identified first, followed by the trade. The DSS Bressert indicator works with all currency pairs and timeframes.

Setting up the DSS Bressert Indicator
Setting up the DSS Bressert Indicator

DSS Bressert Strategy

The DSS Bressert Strategy is a trading strategy that generates momentum signals using a unique mix of EMA and Stochastics. Based on the indicator value and the color of the signal curve, you may be able to discern between bullish and bearish market momentums. The horizontal levels at 80 and 20 in the indicator window reflect the overbought and oversold zones, respectively. You may consider the market to have moved to bullish momentum when the DSS Bressert recovers from 20 and becomes blue. You could look for buy indications if the market is in an overall upswing during such times. In a downtrending market, you could watch for sell signs when the indicator level turns red and falls below 80.

Buy Signal

The following could be your checklist for a buy trade:

  • When the market is in an uptrend.
  • When the indicator crosses the 20 signal line upwards from the oversold region.

Once these two events occur:

  • You could open a buy position after the bullish crossover happens and you get your signal confirmation.
  • 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 crosses the 80 signal line downwards from the overbought region.
  • For good risk management, I would only consider trades with a risk to reward ratio of at least 1:2.
DSS Bressert Indicator Buy Setup
DSS Bressert Indicator Buy Setup

Sell Signal

The following could be your checklist for a sell trade:

  • When the market is in a downtrend.
  • When the indicator crosses the 80 signal line downwards from the overbought region.

Once these two events occur:

  • You could open a sell position after the bearish crossover happens and you get your signal confirmation.
  • 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 crosses the 20 signal line upwards from the oversold region.
  • For good risk management, I would only consider trades with a risk to reward ratio of at least 1:2.
DSS Bressert Indicator Sell Setup
DSS Bressert Indicator Sell Setup

DSS Bressert Pros & Cons

Pros

  • DSS Bressert Indicator may be used with any forex trading system or strategy to confirm trade inputs or exits.
  • The indicator gives a picture of strong price swing positions, trend-reversal zones, and current trend circumstances.
  • This indicator tells when a market is overbought or oversold.

Cons

  • The crossover by the DSS Bressert Indicator sometimes might be a mere trend correction which may deceive the trader.
  • The indicator may not meet the trader’s expectations when scalping on smaller timeframes.

Conclusion

The DSS Bressert is a technical indicator for day/intraday FX and stock traders. It aims to walk the trader through the process of aligning trade entry with appropriate trend directions. Furthermore, the DSS Bressert Indicator is used for trend-following trading techniques.  The DSS Bressert indicator is simple to use, even for novices, and thus suited for traders with varying degrees of training and trading expertise.