QQE INDICATOR MT5

QQE is an abbreviation for the Qualitative Quantitative Estimation.

The indicator is based on RSI enhanced using a smoothing technique. Unlike most indicators, Qqe has withstood the test of time regarding volatility changes, especially after the famous 2008 global financial crisis. Better still, it has no lag and rarely produces false signals.

Trend Trading with QQE Indicator

• The indicator is used to determine the trend. If the indicator is moving above the 10 levels, it is an indication that the trend is an ascending/bullish market. Therefore, you should be looking to buy. This means you can use the indicator as a trade filter by opening a long position when the indicator is above the 10-value level and a short position for lower values.

Overbought and oversold positions

• You can use the indicator to identify when the price is on oversold and overbought positions. Therefore, when the indicator surpasses the 12+ levels, it is a sign of a strong market perfect for a long position. Similarly, you can take a short position if the indicator goes towards negative values.

Divergence with QQE Indicator

• The QQE indicator can help detect price and momentum divergence. For instance, a bullish divergence occurs when the Qqe indicator sets higher lows, but the prices form lower lows. This is a signal of impending bullish reversal.
• Contrastingly, a bearish divergence occurs when the QQE is farming lower highs, but the prices set higher highs indicating a potential bullish reversal.
• Also, when the bold line crosses the trailing line, it is an indication of changing momentum. When the bold line crosses above the slow trailing line, it is a tell-tale sign of bullish momentums. Similarly, when the smooth line crosses below the trailing line, it indicates short-term downside momentum.

 Trading Example

• The picture above shows price movement for the euro against the dollar on a daily frame. The gray line (smoothed RSI) gives a clear picture of the price movement. When the price is rising, the gray line rises with negligible lagging. It also falls in line with downward price movement. Note how the price reverses after reaching the overbought and oversold areas.

The indicator provides a sell signal when the gray line crosses below the lagging green line, as shown by the green arrows. Similarly, the gray line crosses the green line when the price starts to rise. The price experiences a strong trend immediately after the lines intersect.

Conclusion

• The QQE indicator is one of the most accurate indicators. It offers numerous strategies for using the buy and sell signals. Essentially, it can help detect trend reversal and enter the trade at the most optimal positions. You will want to include the indicator in your strategy