April 28, 2009
The Smoothed Repulse Indicator
I'm not sure how common the Smoothed Repulse indicator actually is but it's one that I've recently discovered hidden away in ProRealTime, the excellent charting software, and I have to say I'm quite impressed by it so far.
It's based on the Repulse indicator which is an indicator that shows the bullish or bearish pressure on the price at any one time. It is particularly significant when it crosses above or below the 0 line because this indicates the start of a new bullish or bearish trend.
The Smoothed Repulse indicator is obviously a smoothed out version of this indicator and it does seem to illustrate the trend extremely well, as you can see from the chart below which is a 4 hour chart of the EUR/USD pair:
The default period is 5 but you can also experiment with shorter or longer periods in order to find the setting that works best for you. Some traders like to use multiple settings on the same chart in order to show short, medium and long-term trends at the same time.
You may also like to use multiple time frames to trade the Smoothed Repulse indicator. For example as long as the indicator is below 0 on the daily chart, you may like to trend downward crossovers through 0 on the 4 hour or 1 hour chart, for instance.
There are lots of ways you can use the Smoothed Repulse indicator but on the whole I would certainly recommend you add it to your charts and at least play around with it. It is particularly effective on the longer term charts where the trends are more clearly defined.