How to Use the Xmaster (XHMaster) Formula Indicator in Forex?

The XHmaster (Xmaster) Formula Indicator is a comprehensive technical analysis tool that combines signals from popular indicators like MACD, RSI, Bollinger Bands, and Stochastic to provide clear, color-coded signals directly on the chart. Originally launched in the early 2010s, the indicator has evolved into various versions, including the more responsive 2023 release often referred to as XHMaster.

Features:

• No-Repaint Design: Once a signal appears on the chart, it doesn't change after the fact
• Multi-Indicator Fusion: Combines 5+ technical indicators into one visual system
• Platform Compatibility: Available for MT4, MT5, and TradingView
• Accuracy Rate: Backtesting shared by users indicated accuracy rates of around 70% to 75% in trending conditions

1. Exponential Moving Average (EMA) Calculations

Purpose: EMAs or exponential moving averages are a type of moving average that pay more attention to the most recent price changes. Because of this, the indicator reacts faster than a simple moving average when the price moves.

Standard EMA Formula:

EMA(t) = (Price(t) × K) + (EMA(t-1) × (1 - K))
Where:
K = 2 ÷ (Period + 1)
t = Current period
EMA(t-1) = Previous period's EMA

XHmaster EMA Settings:

Standard Mode EMA Calculation:

In Standard Mode, the indicator calculates the difference between the 10-period short-term EMA and the 38-period long-term EMA and normalizes it to a 0-100 scale.

EMA_Difference = EMA(10) - EMA(38)
Normalized_Value = (EMA_Difference / Price) × 100

2. MACD (Moving Average Convergence Divergence) Formulas

Purpose: MACD (Moving Average Convergence Divergence) is a trend-following momentum indicator that shows the relationship between two moving averages of the price.

MACD Calculation Components:

MACD Line = EMA(12) - EMA(26)
Signal Line = EMA(9) of MACD Line
Histogram = MACD Line - Signal Line

XHmaster MACD Settings:

MACD Signal Conditions:

• Buy Signal: When MACD histogram bars are positive
• Enhanced Strategy: MACD line above the signal line and histogram rising or above zero

3. RSI (Relative Strength Index) Formula

Purpose: RSI is one of the most commonly used indicators to determine overbought (price is too high) and oversold level (price is too low). It shows how quickly and by how much the price is changing over time.

RSI Calculation:

RS = Average Gain / Average Loss
RSI = 100 - (100 / (1 + RS))
Where:
Average Gain = Sum of Gains over Period / Period
Average Loss = Sum of Losses over Period / Period

XHmaster RSI Settings:

4. Stochastic Oscillator Formula

Purpose: The Stochastic Oscillator compares the current price to recent price levels to show how strong a price move is. It helps traders see if the price might be too high or too low.

Stochastic Calculation:

%K = ((Current Close - Lowest Low) / (Highest High - Lowest Low)) × 100
%D = Simple Moving Average of %K over specified period
Where:
Lowest Low = Lowest low over the specified period
Highest High = Highest high over the specified period

XHmaster Stochastic Settings:

5. Bollinger Bands Formula

Purpose: This indicator is all about the lines around the price that show how much the market is moving. Bollinger Bands help traders see when the market is very active and when the price might jump up or down.

Bollinger Bands Calculation:

Middle Band = Simple Moving Average (20 periods)
Upper Band = Middle Band + (2 × Standard Deviation)
Lower Band = Middle Band - (2 × Standard Deviation)
Standard Deviation = √(Σ(Price - SMA)² / Period)

XHmaster Bollinger Bands Application:

The Bollinger Bands is calculated by subtracting the 20-period EMA from the 38-period EMA and then multiplying the result by 2. This indicator is used to indicate extreme price movements or volatility.

Modified BB = (EMA(20) - EMA(38)) × 2

6. Parabolic SAR Formula

Purpose: The Parabolic SAR indicator is used to identify a potential price reversal. When SAR points are below the price it indicates a buy signal.

Parabolic SAR Calculation:

SAR(t) = SAR(t-1) + AF × (EP - SAR(t-1))
Where:
SAR(t) = Current SAR value
SAR(t-1) = Previous SAR value
AF = Acceleration Factor (starts at 0.02, increases by 0.02, max 0.20)
EP = Extreme Point (highest high in uptrend, lowest low in downtrend)

XHmaster Signal Generation Logic

Advanced Mode Signal Conditions

In Advanced Mode, the indicator combines multiple technical indicators to provide more accurate and robust signals.

Buy Signal Requirements (ALL must be true):

1. MACD: Histogram bars are positive
2. RSI: Below 30 (oversold condition)
3. Stochastic: Value falls below 20
4. Parabolic SAR: Points are below the price
5. EMA: Price above short-term EMA

Sell Signal Requirements (ALL must be true):

1. MACD: Histogram bars are negative
2. RSI: Above 70 (overbought condition)
3. Stochastic: Value rises above 80
4. Parabolic SAR: Points are above the price
5. EMA: Price below short-term EMA

XHmaster Indicator Versions & Settings

MT4 Indicator Settings

The XMASTER forex indicator is a formula-based system that uses a combination of technical indicators to identify the price movements of assets. The indicator calculates the 10-period exponential moving average (EMA), 20-period EMA, 38-period EMA, Bollinger Bands (20, 2), MACD (12, 26, 9) and Stochastic Oscillator (5, 3, 3).

2023 Enhanced Version Features

The Xmaster Formula 2023 Version indicator for Metatrader 4, also known as the "xhmaster", is an improved version of the old Xmaster formula indicator, originally launched in 2013. The buy/sell trading algorithm has been enhanced, and trading signals should be more accurate as a result.

Key Improvements:

• Enhanced signal accuracy
• Better visual alerts
• Adjustable sensitivity settings
• Reduced false signals in choppy markets