Stochastic Momentum Index EA Setup - Setting Up SMI EA

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

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

Stochastic Momentum Index Forex Trading Technical Analysis Signals

Developed by William Blau.

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

Stochastic Momentum Index EA 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 & -100, this indicator is also less prone to whipsaws compared to the stochastic oscillator.

Forex Trading Technical Analysis & How to Generate Signals

Buy & Sell Forex Trading Signals/ FX Crossover Trading Signals

The Stochastic Momentum Index can be used to generate buy & sell signals using the method shown below, Buy when the SMI is moving upward and sell when its moving downwards.

Buy & Sell Signals/ Crossover Signals - Stochastic Momentum Index EA Setup