The indicator has been developed to withstand even the most extreme market situations and uses them to collect information. It has been designed to give users’ transparency and accessibility. Sure, the Purple Extreme indicator may not be the best-looking indicator out there, but has some serious muscle and that’s what extreme situations are all about.
4 colours are enough, honey
Using 4 colours, Purple Extreme Indicator helps you distinguish extreme overbought or oversold market status:
Yellow – colour of the price level line.
Mint green – if the price level is found in this area, it means an overbought market and strong rising trend, with the probability of turnover and downward movement.
White – this is a neutral zone where the ratio between buyer and seller is more or less balanced. In the middle of this zone, there’s an intermittent zero line. crossing this line means the prevalence of buyers or sellers (depending on the direction).
Red – the price level in this colour area is distinguished by a strongly oversold market and a dropping trend, where a turnover may occur soon with an upward movement.
As we all know, nothing is perfect and that includes our Purple Extreme Indicator - thus, you should not rely solely on this indicator. However, that does not mean that by its use (or in combination with other indicators), you won’t gain a significant overview of the balance or strengths in the market On the contrary it shall be of great help for you to decide when to open or close a position.
How to work with this indicator and put it into operation? Find out in this video: