Stochastic Momentum Index Expert Advisor Setup - Setting Up SMI EA

Stochastic Momentum Index Expert Advisor Setup - Setting Up Stochastic Momentum Index Expert Advisor - A trader can come up with an Stochastic Momentum Index Expert Advisor based on the Stochastic Momentum Index indicator explained below.

Stochastic Momentum Index Expert Advisor rules can be combined with other Forex trading indicators to come up with other EA Robots that trade using rules based on two or more indicators combined to form a trading system.

Stochastic Momentum Index Forex Technical Analysis Signals

Developed by William Blau.

The Stochastic Momentum Index, SMI indicator is an adaptation of the classic Stochastic Oscillator indicator which smoothes out the stochastic oscillations.

Stochastic Momentum Index Expert Advisor Setup

Construction of Stochastic Momentum Index Indicator

This indicator is calculated by comparing the currency 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 plotted to form the SMI.

When the closing price is greater than the average of the range, the SMI will move upward.

When the closing price is less than the average of the range, the SMI will move downwards.

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

Forex Technical Analysis & Generating FX Signals

Buy and Sell Forex Signals/ FX Crossover Signals

The Stochastic Momentum Index can be used to generate buy and sell signals using the method illustrated below, Buy when the SMI is moving upwards and sell when its moving downward.

Buy & Sell Signals/ Crossover Signals - Stochastic Momentum Index Expert Advisor Setup