Introducing the Dorsey Inertia forex trading indicator. You cannot use this indicator alone to make trading decisions because it is an oscillator based indicator, it only provides information about the current momentum of the market. The Dorsey inertia indicator works similar to the relative strength index and you can use it as a trade confirmation tool rather than the signal generating indicator. This indicator does not distract your attention from the main chart as it lies just below it on the indicator window.
Install Dorsey Inertia, your charting platform should look like this;
The Dorsey Inertia Indicator is just a simple green oscillator. It has a range beginning at 25 to 68, the median line is 50. This means that when the indicator is below 50, it signals bearish market sentiment and when the indicator is above 50 it signals a bullish trend. However, it’s always a smart decision to look at the general direction of the trend rather than blindly following each and every signal this indicator provides. Buy only if the market is trending bullish and sell only if the market is trending bearish.
Conditions for Buying Using Dorsey Inertia Indicator.
- The market should be up trending.
- The Dorsey inertia indicator should cross above the level of 50.
- Place your long position as soon as above conditions are met.
- Place your stop loss just below the recent swing low.
- Take your profit when the Dorsey inertia indicator crosses below the level of 50.
Conditions for selling Using Dorsey Inertia Indicator.
- The market should be down trending.
- The Dorsey inertia indicator should cross below the level of 50.
- Place your short position as soon as above conditions are met.
- Place your stop loss just above the recent swing high.
- Take your profit when the Dorsey inertia indicator crosses above the level of 50.
Download Free Forex Dorsey Inertia Indicator
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