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What is SMI Stock Indexes Indicator?


SMI Indices indicator - SMI technical indicators is a popular stock indices indicator that can be found on the - Indices Indicators List on this website. SMI stock indices indicator is used by stock indexes traders to predict stock indexes price movement based on the chart stock indexes price analysis done using this SMI indicator. Indices traders can use the SMI buy and Sell Indices Trading Signals explained below to determine when to open a buy or sell indices trade when using this SMI indicator. By using SMI and other stock indices indicators combinations traders can learn how to make decisions about market entry and market exit.



What is SMI Indices Indicator? SMI Indices Indicator



Adding a Indices Indicator to SMI Stock Indexes Indicator in MetaTrader 4


Which Stock Indexes Indicator to Combine with SMI?

Which is the best SMI Indices technical indicator combination for stock indexes trading?



The most popular indicators combined with SMI are:

  1. Relative Strength Index

  2. Moving Averages

  3. MACD

  4. Bollinger Bands

  5. Stochastic Oscillator

  6. Ichimoku

  7. Parabolic SAR


Which is the best SMI indicator combination for stock indexes trading? - SMI MetaTrader 4 stock indices indicators


What are the best trading indicators to combine with SMI?

Find additional indicators in addition to SMI indicator that will determine the indices trend of the stock indexes trading market as well as others that confirm the stock indexes trading market trend. By combining stock indices indicators that determine indices trend and others that confirm the indices trend and combining these indicators with Indices Trading SMI indicator a indices trader will come up with a SMI based indices trading system that they can test using a indices trading practice demo stock indexes trading account on the MetaTrader 4 stock indexes trading platform.



This SMI based stock indices trading system will also help stock indexes traders to determine when there is a market reversal based on the stock indexes indicators signals generated and therefore traders can know when to exit the stock indexes market if they have open trades.



What is SMI Stock Indexes Indicator Based Trading? Indicator based stock indexes trading system to analyze the stock indexes price and provide trade signals.


SMI Indices Trading Strategy?



How to Choose the Best SMI Indices Trading Strategy

For traders researching on What is the best SMI indices trading strategy - the following learn indices trading tutorials will help traders on the steps required to guide them with coming up with the best strategy for trading Indices Trading market based on the SMI indicator stock indexes trading system.

How to Create SMI Indices Trading Systems




About SMI Indices Indicator Tutorial


SMI Indices Technical Analysis and SMI Indices Trading Signals

Developed by William Blau.


The SMI is an adaptation of the classic Stochastic Oscillator that smoothes out the stochastic oscillations.


SMI Indices Indicator



Construction of SMI

This indicator is calculated by comparing the stock indexes price relative to the average of an n number of periods.


Then instead of plotting these values directly, smoothing using an Exponential Moving Average is applied and then the values drawn to form the SMI.


When the closing stock indexes price is greater than the average of the range, the SMI will move up.

When the closing stock indexes price is less than the average of the range, the SMI will move down.


This oscillator ranges between the values of +100 and -100, this indicator is also less prone to whipsaws compared to the stochastic oscillator.



Indices Technical Analysis and Generating Indices Trading Signals


Buy and Sell Indices Trading Signals/ Crossover Signals

The SMI can be used to generate buy and sell stock indexes signals using the method shown below, Buy when the SMI is heading upwards and sell when its heading downwards.


Buy and Sell Indices Trading Signals Crossover Signals

Buy and Sell Indices Trading Signals/ Crossover Signals


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Overbought/Oversold Level Crossovers


  • Overbought levels above +40

  • Oversold levels below -40


Buy signal is generated when this oscillator falls below oversold level and then rises above this level and starts to move upwards.


Sell Indices Trading Signal is generated when this oscillator rises above overbought level and then falls below this level and starts to move downwards.


Divergence Indices Trading

The example explained and illustrated below shows a bearish classic divergence between the stock indexes price and the SMI. When the SMI showed this divergence the stock indexes price indices trend reversed and started to move in a downward direction.


Bearish Divergence SMI Indices Indicator

Bearish Divergence

 

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