Understanding the Coppock Indicator for MetaTrader 5 – The Coppock indicator, designed by Edward Coppock back in 1962, is a well-known tool that helps traders identify long-term buy and sell signals. While it’s traditionally used for buying opportunities, it can also signal potential sell points. The indicator works by calculating a weighted moving average (with a period of 10) of the combined rates of change (with periods of 14 and 11). The version available for MetaTrader allows you to tweak the basic parameters to suit your trading style, and you can use it on both MT4 and MT5 platforms.
Input Parameters You Need to Know
- ROC1Period (default = 14) – This is the period for the first Rate of Change in the sum.
- ROC2Period (default = 11) – This is the period for the second Rate of Change in the sum.
- MAPeriod (default = 10) – This is the period for the Moving Average of the sum.
- MAType (only in MT4) (default = 3 (WMA)) – This specifies the method of the Moving Average of the sum; it's best to leave this as is.
When trading with the Coppock indicator, your main strategy should be straightforward: buy when the curve begins to rise from a trough below zero, and sell when it starts to fall from a peak above zero. Remember to ignore the smaller tops and troughs that don’t stand out compared to the surrounding data. This tool is designed to help you catch trends early on, but don’t expect to nail the absolute highs and lows every time.
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