Indicators Guide

Detailed reference for all indicators available in Backtrex: parameters, interpretation, and usage tips.

Classic Indicators

Moving Average (MA)

Smooths price data to identify trend direction.

Parameters:

  • Period: Number of bars to average (default: 20)
  • Type: SMA (Simple), EMA (Exponential), WMA (Weighted)
  • Source: Close, Open, High, Low (default: Close)

Interpretation: Price above MA = uptrend; price below = downtrend. Two MAs crossing is a common entry signal.

RSI (Relative Strength Index)

Measures the speed and magnitude of price changes on a 0-100 scale.

Parameters:

  • Period: Lookback period (default: 14)
  • Source: Close (default)

Interpretation: Above 70 = overbought (potential sell); below 30 = oversold (potential buy). Divergence between RSI and price can signal reversals.

MACD (Moving Average Convergence/Divergence)

Shows the relationship between two moving averages.

Parameters:

  • Fast Period: 12 (default)
  • Slow Period: 26 (default)
  • Signal Period: 9 (default)

Outputs: MACD Line, Signal Line, Histogram

Interpretation: MACD crossing above signal = bullish; crossing below = bearish. Histogram shows momentum strength.

Bollinger Bands

Volatility bands placed above and below a moving average.

Parameters:

  • Period: 20 (default)
  • Multiplier: 2.0 (default, standard deviations)

Outputs: Upper Band, Middle Band, Lower Band

Interpretation: Price touching upper band = potential overbought; lower band = potential oversold. Band squeeze indicates low volatility (potential breakout).

Stochastic Oscillator

Compares closing price to price range over a period.

Parameters:

  • %K Period: 14 (default)
  • %D Period: 3 (default, smoothing)

Interpretation: Above 80 = overbought; below 20 = oversold. %K crossing %D generates signals.

ATR (Average True Range)

Measures market volatility.

Parameters:

  • Period: 14 (default)

Interpretation: Higher ATR = more volatility. Useful for setting dynamic stop-loss levels (e.g., 2x ATR below entry).

ADX (Average Directional Index)

Measures trend strength on a 0-100 scale.

Parameters:

  • Period: 14 (default)

Interpretation: Above 25 = strong trend; below 20 = weak/no trend. Does not indicate direction, only strength.

Smart Money Concepts (SMC/ICT)

Swing Points

Detects significant price reversals (swing highs and swing lows).

Parameters:

  • Left Bars: Bars to the left to confirm (default: 5)
  • Right Bars: Bars to the right to confirm (default: 5)

BOS and CHoCH

  • Break of Structure (BOS): Price breaks a swing high in an uptrend or swing low in a downtrend, confirming trend continuation
  • Change of Character (CHoCH): Price breaks structure in the opposite direction, signaling a potential trend reversal

Order Blocks

Institutional supply/demand zones where large orders originated.

Parameters:

  • Lookback: Number of bars to scan (default: 50)

Interpretation: Bullish OB = last bearish candle before a strong up move. Bearish OB = last bullish candle before a strong down move. Price often returns to these zones.

Fair Value Gaps (FVG)

Three-candle pattern where the middle candle's range does not overlap with the outer candles, creating a "gap" in fair value.

Interpretation: Price tends to return to fill FVGs. Bullish FVG = gap below price (support); bearish FVG = gap above price (resistance).

Kill Zones

Time-based filter for specific trading sessions.

Parameters:

  • Session: London, New York, Tokyo, Sydney (or custom hours)

Interpretation: Restricts signals to high-volume trading hours, filtering out low-liquidity periods.

MA Slope Indicator

Measures the angle/direction of a Moving Average.

Parameters:

  • MA Period: 20 (default)
  • Slope Lookback: 1 (default, bars to measure slope over)

Interpretation: Positive slope = uptrend; negative slope = downtrend. Steeper slopes indicate stronger trends.

Tips for Combining Indicators

  1. Trend + Momentum: Combine MA (trend) with RSI (momentum) for filtered entries
  2. Volatility filter: Use ATR or Bollinger Bands to avoid trading in low-volatility conditions
  3. Multi-timeframe: Use a higher timeframe MA for trend direction and a lower timeframe oscillator for entry timing
  4. SMC + Classic: Combine Order Block zones with RSI oversold for high-probability entries