Warrior Indicator - Comprehensive Explanation

This custom MetaTrader 4 indicator combines Stochastic Oscillator and Bollinger Bands to generate trading signals based on market momentum and volatility conditions. Below is a detailed breakdown of how it works:

🔵 Indicator Logic & Components

1. Core Components

Stochastic Oscillator (Main Signal Generator)

Fast %K (5)

Slow %D (11)

Smoothing (11)

Price Input (Close by default)

Calculation Method (Simple Moving Average by default)

Bollinger Bands (Volatility Filter)

Period (20)

Deviation (2)

Applied Price (Median Price)

2. How It Works

The indicator operates in two modes:

📌 Mode 1: Flat Market Detection (Low Volatility)

Checks if the Bollinger Bands width is below the flat threshold (0.004 by default).

If true, it simplifies the Stochastic signals:

Buy Signal: When %K (blue line) crosses above %D (white line), it sets:

Buf_0[i] = 55 (upper level)

Buf_1[i] = 45 (lower level)

Sell Signal: When %K crosses below %D, it sets:

Buf_0[i] = 45

Buf_1[i] = 55

📌 Mode 2: Normal Market (High Volatility)

If Bollinger Bands are not flat, it displays the standard Stochastic Oscillator:

Buf_0[i] = %K

Buf_1[i] = %D

🔴 How to Use This Indicator

📈 Buy Signals (Low Volatility Mode)

When %K (blue) jumps to 55 and %D (white) drops to 45 → Potential Buy

Confirmation:

Price near lower Bollinger Band

RSI/Price Action supports reversal

📉 Sell Signals (Low Volatility Mode)

When %K (blue) drops to 45 and %D (white) rises to 55 → Potential Sell

Confirmation:

Price near upper Bollinger Band

Bearish candlestick patterns

🔄 Normal Market Mode (Standard Stochastic Rules)

Buy: %K crosses above %D (in oversold zone, e.g., below 20).

Sell: %K crosses below %D (in overbought zone, e.g., above 80).

⚙️ Input Parameters

ParameterDefaultDescription

K5Fast %K period

D11Slow %D period

slow11Stochastic smoothing

avg_meth0 (SMA)MA calculation method

price1 (Close)Price source for Stochastic

flat0.004Bollinger Bands flatness threshold

📌 Practical Trading Tips

✅ Best Timeframes: M15-H4 (works well in ranging & trending markets).

✅ Best Pairs: Forex majors (EURUSD, GBPUSD) & indices.

✅ Combine With:

Candlestick patterns (Doji, Engulfing)

Support/Resistance levels

RSI divergence for stronger confirmation.

⚠️ Limitations:

May give false signals in strong trends (use trend filters).

Requires manual confirmation (not a standalone system).

🎯 Conclusion

The Warrior Indicator is a hybrid momentum-volatility tool that:

✔️ Simplifies trading in low-volatility (flat) markets.

✔️ Functions as a standard Stochastic in trending markets.

✔️ Helps spot reversals early when combined with price action.