The SFI Indicator gives buy and sell signals for trading forex. You simply attach it to the currency pair and chart timeframe that you are trading. When the SFI Indicator algorithm detects a potential uptrend, it will display green arrow. On the other hand, when the SFI Indicator algorithm detects a potential downtrend, it will display a red arrow. This makes it very easy to use, although I would personally conduct my own technical and fundamental market analysis before blindly taking the SFI Indicator signals. I would also ensure that I had sound money management principles in place, with a comfortable stop loss level and favourable risk to reward ratio, ideally of at least 1:3.
SFI Indicator Strategy
As mentioned in this SFI Indicator review introduction, this is a manual trading indicator from SinryAdvice that gives buy/sell signals via colour coded arrows. It is compatible with the ever popular MetaTrader 4 (MT4) platform. You will need the desktop version of MT4 in order to install the SFI Indicator. Once ready, you simply drag and drop it onto your chosen charts. It will then scan the market for trading signals.
The indicator is extremely easy to use, but that does not mean that the signals it generates are guaranteed. You should be aware of the risks involved with trading online using any forex indicator, manual or automated system. You can implement the SFI Indicator within your own trading strategy and use it as an additional filter, rather than a stand-alone manual trading system.
One of the main aspects of the SFI Indicator I like, is the fact that it is very flexible. It can be used on any trading instrument and chart timeframe. The SFI Indicator signals are always either a buy or a sell. We do not need to wait for it to change direction if we are just trying to determine the overall trend, although there is an argument that waiting for it to change may pin-point the formation of a trend at the earliest opportunity.
The SFI Indicator attempts to find market trends. Now, this is something you could just do with a basic moving average that is already included within the MT4 platform. That being said, the developer does provide some video tutorials of SFI Indicator strategies, whilst it can also send you SMS and pop-up alert notifications when it finds a valid trading signal. This means that you do not necessarily need to sit and stare at chart all day long, unless of course you want to!
The developer does mention the fact that the SFI Indicator is designed to take a few smaller losses in order to try and catch a larger win. This is something I often see with trend trading strategies. They can tend to get “whipsawed” in and out of the market when it is range bound, but flourish when a significant trend is established and the entry is taken early on. It should go without saying, always use a stop loss that you feel comfortable with. On another note, they mention that the indicator can change direction mid-bar, and thus you would want to wait for a bar to close before confirming the SFI Indicator signal.
SFI Indicator Features
Now we have a good idea of what the SFI Indicator can do, lets take a look at some of its key features:
- MetaTrader 4 platform
- Any trading instruments
- Any timeframe
- Colour coded buy/sell arrows
- Non-repainting indicator (after bar closed)
- Pop-up notification with sound alert
- Manual trading strategy
- Onetime payment
- Free updates
- Easy to use
- Free Installation and setup tutorial video
SFI Indicator Summary
Putting it all together, I personally believe that the SFI Indicator does have some potential. However, I would not use it on its own. I would conduct additional technical analysis to confirm the trend across multiple timeframes to try and identify overbought/sold areas where I could consider getting into the trade at a favourable price point.
Furthermore, I would keep an eye on the fundamentals of my chosen currency pair, just to make sure there are not going to be any nasty surprises that may cause some extreme market volatility.
Regardless, we can have the best forex indicator in the world, that picks market lows and highs like clockwork. But it is useless if we do not have sensible money management in place. If an indicator gave 9/10 winning signals and we took 10 pips on each, we would be up 90 pips. However, if our stop loss was 100 pips, the single loss would wipe out all 9 wins and see as down 10 pips to boot. That’s not to even mention the trade costs such as the spread, slippage, commission and swaps.
Anyways, if you are a fan of trend trading and like to experiment with manual trading strategies, you could always test the SFI Indicator on a demo trading account to begin with and see how you get on.