Disparity Index Forex Indicator

The Disparity Index forex indicator for MetaTrader is a technical momentum that links market price to a time-specific moving average of the prices in the market. Chartist tend to use the disparity index as a tool to spot signals of trend strength and the likelihood of an impending exhaustion.

Other traders and analysts deploy the Disparity Index as a tool for defining oversold and overbought regions for a particular asset.

An asset is said to be overbought when the index yields a value that is greater than or equal to the upper bound level, and it is said to be oversold when the index returns a value that is lower than the lower bound level.

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Download the “Disparity_Index.ex4” MT4 indicator

Example Chart

disparity_index-forex-mt-4-indicator

The Disparity Index indicator is based on the correlation between a current trading price and its most recent closing price. Just like other momentum indicators, the Disparity_Index indicator is most suited when used along with other tools when a trader is trying to spot possible reversals or confirm a trend.

The price of a currency pair may spike or drop quickly within minutes, if not seconds. The Disparity_Index indicator is designed to gauge just what is tagged too severe of a spike or drop, offering simplicity in a condition that might otherwise be perceived as random.

This trading indicator assumes that prices are sensitive to obsessive sessions of buying or selling, even within a trend. The Disparity_Index indictor can be used to sort for continuation pattern during short term or a total reversal in trend in the long term.

Download

Download the “Disparity_Index.ex4” MT4 indicator

MT4 Indicator Characteristics

Currency pairs: Any

Platform: Metatrader 4

Type: chart window indicator

Customization options: Variable (DispPeriod), Colors, width & Style.

Time frames: 5-Minutes, 15-Minutes, 30-Minutes, 1-Hour, 4-Hours, 1-Day, 1-Week, 1-Month

Type: momentum oscillator

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