McClellan Summation Index Smoother Indicator MT4 | MT5

The McClellan Summation Index Smoother indicator is an enhanced version of the MSI indicator, which measures the cumulative difference between the number of advancing and declining stocks in a given market. This smoother version provides an adjusting component to the index, making it more sensitive to longer-term trends and reducing short-term volatility.

Furthermore, this indicator helps traders identify the overall health of a market, offering clearer insight into whether the trend is bullish or bearish, and spot potential trend reversals to determine the best trade decisions. 

• Trend identification:

- When the MSIS is rising, coloring green, it signals a bullish market direction, suggesting a long opportunity.

- When the MSIS is falling, coloring red, it indicates a bearish market situation, signaling a short opportunity.

• Potential reversal:

* Bearish divergence: During an uptrend, if the price forms higher highs but the indicator shows lower highs, it suggests a potential bearish reversal.

* Bullish divergence: During a downtrend, if the price forms lower lows but the indicator shows higher lows, it suggests a potential bullish reversal.

It is recommended that traders should combine this indicator alongside other categories of technical analysis indicators, such as trend-following, volume, or even patterns, before entering the market.

1. In the EURUSD chart example on MetaTrader 4, the MSIS indicates a green impulsion, suggesting a bullish momentum. As the indicator forms higher lows and higher highs, it signals the continuation of the upward trend. 

When the line turns red with a break below the support line, it suggests a potential trend reversal. Once it is confirmed by the appearance of the bearish divergence, it marks the start of the downward trend, presenting a short trading opportunity.  

2. In the CHFJPY chart example on MetaTrader 5, the MSIS indicates a red impulsion, suggesting a bearish movement. As the indicator forms lower highs and lower lows, it confirms the continuation of the downward trend.

When the line turns green with a break above the resistance line, it suggests a potential trend reversal. Once it is confirmed by the appearance of the bullish divergence, it marks the beginning of the upward trend, presenting a long trading opportunity.