✔️ Information reviewed and updated in December 2023 by Eduardo López
To start talking about the Repulse indicator it is first necessary to know what a trading indicator is. Indicators are fundamental tools to better understand technical analysis, since they are mathematical calculations that are represented through a chart by price lines.
Its main function is to help traders to identify the signals and trends that are happening within the financial market. Trading indicators are considered important materials to determine the evolution and the price that you want to know, and thus make decisions in a more viable way.
A wide variety of types of trading indicators can be found today, traders need to use their knowledge and risk tolerance when choosing them for their strategies. Next, we will tell you everything about the Repulsa Indicator: its definition, what it is for, and what is its interpretation.
✨Definition of the Repulsa Indicator
The repulse indicator measures and symbolizes the bullish and bearish momentum found in each candle on the chart in the form of a curve.. It is a complementary indicator that has no value on its own. Its function is to compare it with the evolution of the prices.
However, it is not related to the evolution of the quotes as is the case of a MACD, an RSI or a stochastic. What the indicator contributes is very important additional information about the sentiment and confidence of traders regarding the evolution of prices.
✨ What is Repulsa for?
The repulsion indicator is used to determine sentiment. When it is trending up it would be reflecting increasingly positive bullish sentiment, and when it is trending down it would be reflecting increasingly negative bearish sentiment in the underlying market.
In addition, this indicator can be used to determine a very strong change in trend by overlaying time indicators from different time frames. When the shorter period repulse indicator crosses the slower and longer period repulse indicator, this may indicate a strong directional movement.
✨ What is your interpretation?
Traders generally consider it a good method to display the repulse (1) indicator on the same chart to examine the trend in the very short term, the repulse (5) for the short term, and the repulse (15) for the medium term. .
An example is that in a 1 'chart the health of the trend can be observed in a synchronized way over 1, 5 and 15 minutes.
The repulse indicator provides very good signals when it slows down to 15, reverses at 5, and diverges by 1 as the current trend accelerates to horizontal support or resistance.
These signals turn out to be very strong when associated with divergent Cycles Indicator, and a revealing increase in volumes. For this reason, the success rate becomes very high if the prices and the aforementioned signals exit a trend channel in the direction of the trend.