This indicator is based upon moving averages and it is good for the intraday traders. The indicator has a relative efficiency level of about 75%. It is a good indicator to trade with especially if you are a Forex trading beginner. It does or the work and gives you signals of when to place or close your orders and hence makes trading easy and less hectic.
How does this indicator work?
The Urban Towers indicator is based on six moving averages of which varies in their shift factor. The shift factor is a parameter that is used in the moving averages in order to literally move the moving average line forward or backwards by some value.
This indicator is a trend indicator. The increased number of moving averages serves as a way of eliminating false signals.
The six MAs are divided into two. Three upper moving averages and three lower moving averages. The three upper moving averages are aqua in color while the three lower moving averages are green in color. You can always change this colors to match you colors of choice. The three upper moving averages usually move in a closely similar ways while the three lower moving averages the same. Therefore all the three upper moving averages at times cross over the three lower moving averages.
Apart from displaying the moving averages lines on the chart, the indicator also displays arrows which are the main entry signals. The trader has to wait for arrows to appear for him or her to place a sell or a buy order. Sometimes, the indicator may generate similar arrows following each other which acts as a confirmation of the previous trend of the market prices.
Fig.1. The Urban Towers indicator.
The color of the arrows generated are either aqua or red. The aqua arrows shows a down trend while the red arrows shows a down trend of the market prices. When the arrows are generated, the indicator also draws a line at the level at which the order should be placed. This assists in identifying the actual market level the signal was given thus helping the trader to decide whether to place an order or not in case he or she was not on the chart when the signal was given. For example, you might have logged into the GBP/USD chart and then after some time you switch to the EUR/USD. And then one you switch to the EUR/USD, you notice that there was a sell signal that was given a while ago. By looking at the point of the line and the distance from the line or the number of candlesticks that have formed from then, you should be able to determine whether it is worth it to place a sell order or to wait for another signal.
Using the Urban Towers indicator to place and close orders.
Aqua arrows – you should place a buy.
Red arrows – you should place a sell order.
When placing any of the trades, you should avoid placing your trades when it is too late (if it is a long duration since the signal was given).
Also, you should use stop levels. You should use take profits and stop losses of a ratio of 1:1. That is, if you place your stop loss at 15 pips, you should place your take profit at the same 15 pips.
Fig.2. Placing orders using the Urban Towers indicator.
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