EATA Indicator

Many traders enjoy trading in the direction of the trend. Having an indicator that tries to predict trend direction could be beneficial to traders who ride trends. The EATA Indicator, with the aid of its oscillators, could be a beneficial tool for technical traders.

What is the EATA Indicator?

Based on the RSI and CCI oscillators, the EATA indicator sends signals to the input of the points of a trend reversal. At the same time, the EATA indicator employs fast RSI instead of the standard RSI. The difference is that in a standard oscillator, the RSI value is calculated using the exponential method, whereas in a fast RSI the simple method is used.

Setting up the EATA Indicator
Setting up the EATA Indicator

EATA Strategy

The crossing of the indicator’s red and blue curves is a buy or sell indication. The EATA indicator additionally provides trading signals in the form of blue and red buy/sell confirmation arrows for the trader’s convenience. The blue arrow indicates a buy signal, while the red arrow indicates a sell signal.

Buy Signal

The following could be your checklist for a buy trade:

  • When the asset being traded is up trending.
  • When the indicator lines plot a bullish crossover.
  • When the indicator plots a green up arrow at the bottom of the candlesticks.

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 plots a red down arrow at the top of the candlesticks.
  • For good risk management, I would only consider trades with a risk to reward ratio of at least 1:2.
EATA Indicator Buy Setup
EATA Indicator Buy Setup

Sell Signal

The following could be your checklist for a sell trade:

  • When the asset being traded is down trending.
  • When the indicator lines plot a bearish crossover.
  • When the indicator plots a red down arrow at the top of the candlesticks.

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 plots a green up arrow at the bottom of the candlesticks.
  • For good risk management, I would only consider trades with a risk to reward ratio of at least 1:2.
EATA Indicator Sell Setup
EATA Indicator Sell Setup

EATA Pros & Cons

Pros

  • The EATA Indicator can be used to predict potential trend reversal and trend continuation zones.
  • The indicator may also be employed when trading with divergence.

Cons

  • The EATA Indicator may sometimes mistake a trend correction for a trend reversal, and vice versa.
  • This indicator may require the traders to have knowledge of price action in order to benefit optimally.

Conclusion

The EATA Indicator is worth including in your trading arsenal. A good forex indicator may boost your chances of success. Nonetheless, keep in mind the importance of having realistic expectations. EATA Indicator, like any other technical analysis tool, is not capable of providing 100% accurate signals. As a result, this forex indicator occasionally generates false signals. Its performance will be highly variable depending on market conditions. You are free to create your own trading system based on it.

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