Coppock Curve Indices Technical Analysis and Coppock Curve MT5 Stock Indexes Indicator
Developed by Edwin Sedgwick Coppock
This MetaTrader 5 stock indices indicator was used for technical analysis of Stocks & Commodities in the beginning but was later used to trade Indices.
The principle behind this is the psychology of trading, based on the theory that human habit is predictable. And stock indexes price movement always oscillates in a zigzag manner.
The principle of adaptation-level applies to how stock indexes price reacts at certain levels, stock and stock indices prices will react in the same way or pattern as those observed historically.
Indices Technical Analysis and Generating Indices Trading Signals
In indices trading, The moving average is the simplest form of an adaptation-level, the stock indexes price will oscillate around the moving average. This forms the basis of this MetaTrader 5 stock indices indicator, which is a longer term oscillator MT5 stock indices indicator based on this adaptation-levels(moving average), but in a different way.
Oscillators usually begin by calculating a % change of the current stock indexes price from some previous stock indexes price point, where the previous stock indexes price point is the reference point (adaptation-level).
Edwin Coppock reasoned that the stock indexes trading market participants' emotional state could be quantified by summing up the % changes over the recent past to get a general sense of the stock indexes trading market's longer term momentum.
For example, If we compare indices prices relative to a year ago and we see that this month the stock indexes trading market is up 20% compared to a year ago, last month it was up 15% over a year ago, and 10%, 7.5% and 5% respectively the months before that, then we may determine that the stock indexes trading market is gaining momentum.
Basic signals can also be generated using the Coppock Curve to trade market reversals from extreme stock indexes price levels. Looking for divergence and indices trend line breaks may also be combined to confirm the signal.
The input levels of this MetaTrader 5 stock indices indicator may need to be adjusted to better fit the dynamic nature of the stock indexes trading markets trading.
Coppock Curve has a zero line reference point, but this does not represent the adaptation-level but it is only a visual reference point only.