Coppock Indicator MT5

The Coppock Indicator is a classic momentum oscillator developed by economist Edwin “Sedge” Coppock in 1965. Interestingly, it was originally commissioned by the Episcopal Church as a tool for long-term investment analysis in the stock market. Designed to identify buying opportunities, the Coppock curve smooths momentum data to highlight potential reversals and trend continuations. While traditionally used on daily charts for long-term positions, traders today also apply it to intraday forex markets.

Key Features

• Momentum Oscillator: Smooths the Rate of Change (ROC) indicator to highlight market momentum.
• Zero Line Crossovers: Provides clear BUY and SELL signals.
• Long-Term Focus: Originally intended for daily, weekly, and monthly charts.
• Versatile Application: Can also be used on intraday forex charts.
• Simple Settings: Easy to configure and interpret.

How to Trade with the Coppock Indicator

The Coppock curve is plotted in a separate window under the price chart, typically colored green:

• BUY Signal: When the Coppock line crosses the zero level from below, traders can open long positions.
• SELL Signal: When the Coppock line crosses the zero level from above, traders can enter short positions.

Trading Example

• On the USD/JPY H4 chart, the Coppock line crossed above zero, signaling a long entry.
• On the EUR/CHF intraday chart, the Coppock line crossed below zero, signaling a short entry.

Stop losses are best placed above recent highs (for shorts) or below recent lows (for longs), while exits can be managed using opposite signals or personal risk management rules.

Advantages

• Provides both BUY and SELL signals.
• No recoloring of signals.
• Free to download and easy to install.
• Works across multiple timeframes and instruments.

Disadvantages

• No arrows or visual markers.
• Effectiveness may be limited in today’s fast-paced, algorithm-driven markets.
• Best used in combination with other indicators for confirmation.

Conclusion

The Coppock Indicator is a timeless oscillator that smooths momentum to provide clear signals for long-term investments and intraday forex trading. While not the most advanced tool available today, it remains a valuable addition to any trader’s toolkit when combined with other strategies.