Overview
The ‘Overlay & Signals’ indicator is your comprehensive tool for efficient market analysis. This indicator combines the visualization of important market structures, precise trend-following signals and integrated risk management options. Designed to help both new and experienced traders identify optimal trading opportunities.
Functions of the SMC indicator
- Range Clouds
- Midline
- Colored bars
- Supertrend
- Reversal signals with alarm function
- 3 sensitivity settings
- Automatic take-profit and stop-loss function
Range Clouds
The Range Clouds are a specialized feature of the “Overlay & Signals” indicator and serve as a visualization of overbought and oversold price areas. These cloud-like formations indicate zones where the price has reached a high or low extremity and is potentially vulnerable to a reversal or correction.
The density of the clouds correlates with the strength of the overbought or oversold condition, with a higher density indicating a stronger reversal potential. This allows traders to make more informed decisions about entry and exit points.
2. Midline
The midline is a central line within the “Overlay & Signals” indicator, which serves as an important indicator for the general market structure. The color of the line changes depending on the underlying market structure:
Green signals a bullish market structure, while red indicates a bearish trend. These color changes provide the trader with a quick and easy way to identify the current market status.
In cases where the midline is horizontal and shows no clear upward or downward slope, this indicates a sideways movement in the market. This allows traders to identify not only trends but also consolidation phases and adjust their trading decisions accordingly.
3. Barcolors
The Barcolors function in the “Overlay & Signals” indicator is used to display the current market structure in a visually appealing way. The color of the bars in the chart varies between green, yellow, orange and red to reflect the respective market sentiment.
A green bar signals bullish market sentiment, while a red bar indicates bearish sentiment. Yellow and orange bars often indicate neutral or indecisive market sentiment.
This color coding allows traders to see at a glance which market trends and structures are currently prevailing and to adjust their trading strategy accordingly.
4. Supertrend
The Supertrend in the “Overlay & Signals” indicator is used to visualize the current market trend. It changes color and position in relation to the price, which serves as a guide to the trend direction. This feature offers a simple but effective way of recognizing the prevailing trend and aligning trading decisions accordingly.
5. Reversal signals with alarm function
The “Reversal Signals” function identifies possible reversal points in the market and marks these directly in the chart with colored arrows: Green for potential buy signals and red for potential sell signals.
This visual aid is supplemented by an integrated alert function that automatically notifies the trader as soon as such a reversal point is reached. These real-time alerts make it possible to react quickly to market changes and make appropriate trading decisions.
Alert function
In addition to the colored arrows for reversal points, the “Reversal Signals” section is equipped with a specialized alert function. This function sends automatic notifications to the trader as soon as an identified reversal point is reached.
6. Automatic take-profit and stop-loss function
This feature acts in real time and automatically generates three take-profit zones and a stop-loss point on the chart as soon as a trading signal is detected. The take-profit zones are visualized as green lines, while the stop-loss point is represented by a red line.
7. Sensitivity setting
The function offers three sensitivity levels for the indicator. The higher the setting, the more signals are generated, but at the expense of accuracy. This allows for quick adjustment depending on trading style and market conditions.
