The Klinger Volume Oscillator MT4 was developed by Stephen J. Klinger and it has the same appearance as the traditional MACD indicator, but the difference is that the Klinger Volume Oscillator displays real-time imbalances between buying and selling pressure. This is a volume-based indicator that will help you in both short and long term analysis. The word Oscillator” means that it’s basically a bounded study and it has an upper limit value and it has a lower limit value. The developer of the Klinger Volume Oscillator recommends the following guidelines for using his oscillator.
Klinger’s first advice was that the most reliable signals occur in the direction of the prevailing trend and the most important signal occurs when the Klinger Oscillator diverges with the underlying price actions. For instance, if a currency pair is moving higher but you got the Klinger Volume Oscillator moving lower that’s a sign that the trend might be losing momentum and is near completion.
Another advice is that if a currency pair is in an uptrend you have to buy when the Klinger Volume Oscillator drops to unusually low levels below the zero line and then turns up and crosses above its trigger line. If a currency pair is in a downtrend, you have to sell when the Klinger Volume Oscillator rises to unusually high levels above zero and then turn down and crosses the trigger line.
Klinger Volume Oscillator MT4 Settings
The preferred settings for the Klinger Volume Oscillator MT4 indicator are the default settings. The indicator has three main components or three exponential moving averages. The “FastEMA” variable is the fast moving average and has a value of 34; the “SlowEMA” is the slow moving average and has a value of 55; while the “SignalEMA” is another fast moving average and has assigned a value of 13.
Both the fast and slow moving averages are used in combination with the high-low price range, volume and accumulation/distribution are used through a proprietary algorithm to determine the buying and selling pressures.
Klinger Volume Oscillator MT4 Strategy and Trading Rules
The Klinger Volume Oscillator was developed to be used in short-term trading as well as in long-term trading and no matter what type of trader you are, you can benefit from using this oscillator in combination with your own strategy. The Klinger Volume Oscillator MT4 indicator can also be used as a standalone strategy and going forward, we’re going to learn the buy/sell signal rules:
- Buy Signal: When the signal line (red line) crosses above the zero level and the histogram is showing buying pressure (above the zero line) buy at the market using a protective stop loss below the most recent swing low. Take profit once the histogram crosses back below the zero line.
- Sell Signal: When the signal line (red line) crosses below the zero level and the histogram is showing selling pressure (below the zero line) sell at the market using a protective stop loss above the most recent swing low. Take profit once the histogram crosses back above the zero line.
Klinger Volume Oscillator MT4 Trade Example
The Klinger Volume Oscillator strategy works best on the 5-minutes time frame and in Figure 3 we have the EUR/USD 5-minute chart and both a short and long trading opportunities are highlighted. The same rules can be applied to your preferred time frame as well as this strategy is not limited to a single time frame.
The Klinger Volume Oscillator was developed with two seemingly opposite goals in mind, firstly to be sensitive enough to signal short-term tops and bottoms and secondly it had to be accurate enough to reflect the long-term trend.
Recommended Time Frames for Klinger Volume Oscillator MT4
Technically speaking, you can use this MT4 indicator for all time frames. However, the shorter the time frame, you will see more fluctuation and possibly more whipsaw which may cause small losses that can eat up your portfolio quickly. We recommend that you use higher time frames like the 4H for better consistency.
Klinger Volume Oscillator MT4 Download
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