Welcome to the next Stonehill Forex Indicator Study.  This research represents an investigative look into how and why some indicators work and some don’t work as well.

New Versus Old

We are introducing indicators not included with the MT4 platform to find more efficient indicators which may yield superior results than older indicators better suited for different markets.


We’re highlighting a very easy to use indicator this week called the Coral.  This indicator identifies trends by using a moving average type of line; however, the signals are exceptionally clear…and there’s a value added bonus, which we will discuss below.

Thank You Mysterious Person

Through our research, we were a bit surprised to discover how many coders have made different versions compatible on different trading platforms other than MT4.  This told us that there was something special about it.  We even found it being sold for $147 on one site.  Thankfully, you can get it from us for free.  Most of the dates we uncovered were between 2019 and 2022; however, the oldest recorded date we could locate was 2015 with no credit given to its original inventor.

Why So Special?

For such a simple looking indicator, it certainly hides a lot going on in the background.  The Coral indicator uses something called a “Linear IIR Filter”…the IIR stands for “Infinite Impulse Response”.  It is a combination of moving averages obtained by triple (or higher) order exponential smoothing based against something called the “normalized slope of the plot”.  This gives the indicator a nice smooth line.  Some versions have added features and more settings; but we’ll be testing one of the more basic versions.

Confirmation Indicator

This indicator is considered a “confirmation indicator” which falls into the category of indicators that serve as an initial checkpoint after the baseline indicator provides you with a foundational signal.  You’ll also notice that the Coral, is an “on chart” indicator which overlays price.

Exit, Stage Left?

Should this indicator be used to signal exits?  It can…after all, it gives you clean and definitive signals.  Is it the best?  Maybe, maybe not.  It all depends on your individual algorithm.

Blue & Red…and Yellow

Below is a screenshot of what the original indicator looks like on the daily time frame.  Note that we’ve changed the color of the candles to white to remove any emotional bias and that only the indicator is prominent.



Alert_Coral_Crossing:  This setting toggles between “false” and “true”.  A helpful alert, when toggled to “true”, a pop-up window in the chart indicates when Coral is crossing from above/below. The default position is “false” or off, in this case.

gi_84:  Simply stated, the “gi_84” setting is named for the number of periods that the indicator uses to calculate data and draw the line; similar to a “period” setting for a moving average.  The default value is 34.


* Colors indicator direction of trend.

* Entries/Exits are easy to interpret.

* Can be used an exit indicator.

How We Use It

The wonderful thing about this indicator is that it’s so easy to use.  Between the color change and pop-up alert, it’s really simple to understand.

Long – The signal line goes from red, to yellow, to blue.  The entry is the open of the period after yellow, while the exit (if used as an exit signal) is the close of the current signal candle.

Short – The signal line goes from blue, to yellow, to red.  The entry is the open of the period after yellow, while the exit (if used as an exit signal) is the close of the current signal candle.

Let’s take a look at a marked up example to see how you might interpret the long and short signals.

Looking closely, you can see a very small section of yellow line between the trend changes, colored in “yellow”.  We’ve zoomed in to give you a better view of this.

And an extreme close up, so you can see exactly where exit/entry points are.

To better illustrate the mechanics, we made two screen recordings to demonstrate the indicator in action.  Below are snapshots of each sequence.




Remember, comprehensive analysis is strongly suggested, and we advocate backwards and forward testing indicators or systems prior to trading actual funds. We propose conducting your tests on the following five pairs.






If it doesn’t work on these five pairs, chances are it won’t work on other pairs. This is not an absolute, but we’ve found this rule is reliable in most cases.

We’ve added two other pairs to our testing sequence based on feedback we’ve received from our community.  They are the:

BTC/USD (Bitcoin/US Dollar)

XAU/USD (Gold/US Dollar)


Timeframes and Results

In our initial test, we’ll run the Coral Indicator on the EUR/USD, the BTC/USD and XAU/USD using the default settings across the daily and 4-hour timeframes on the MT4 strategy tester. We use the fast method of testing the indicator to get a general idea; however, you may also run the tick-by-tick data set for a more precise result (which takes considerably more time).

As No Nonsense Traders – and therefore Swing Traders, we will not examine shorter time frames in these studies.  We will also run an additional test, using different values for the settings, to analyze which one may work better and examine the following results:

Total trades

Win/Loss ratio

ROI (return on investment)

There are other metrics included in the strategy tester report, which can be compared, but these three metrics provide the necessary gauge to make quick decisions as to the usefulness of a particular indicator and its settings.

Next, for comparison, we’ll explore the following;

Daily – 1 year

4-hour – 3 months

The reason exceptionally long (or short) testing periods are not included is due to changing market conditions, which might return irrelevant information. A balance of statistically significant data is necessary for accurate results.

And the Outcome…

Below are the spreadsheets listing the results from our tests.

The green highlighted rows represent “basic tweaks” on the settings which returned better results. Are these the best? Not necessarily. Given that variables including testing date range and broker data are different from person to person, you may find better settings.

Trust in Yourself

Remember, the overall NNFX philosophy of taking profit, risk, and drawdown is that YOU are creating a system which YOU will be trading. Don’t let anybody else take that away from you. Part of the learning process is digging in and doing the work yourself. To learn more about these topics, check out the Advanced Course!

That beings said, the results we post in these blogs should never be considered specific trading advice.


***Note: Remember, never use just this one indicator as your decision of whether to open or close a trade. It should be part of a system.

Money Management

If you are curious as to what money management is used on our tests; we have a certain way of determining wins and losses, which can be found in the Advanced Course. Our goal here is to determine how well the indicator reacts to price with respect to producing a long or short signal. Your system, with its risk profile, will dictate individual returns.


As we did with past indicator studies, we’ve made the Coral indicator available for download on our site from the indicator library.  We will keep adding better indicators with each study for your use, at no charge.  When you’re ready to get it, click HERE.

More to Come

There’s a lot more to come. We are excited to provide more trading tips in the near future. Sign up on our contacts page or subscribe to our YouTube channel. Receive early notifications as we continue to publish helpful, relevant, and informative Forex related material to support your quest to become a better trader.

And, now you are aware of another indicator that many traders don’t know or use.

Our only goal is to make you a better trader.

BTW – Any information communicated by Stonehill Forex Limited is solely for educational purposes. The information contained within the courses and on the website neither constitutes investment advice nor a general recommendation on investments. It is not intended to be and should not be interpreted as investment advice or a general recommendation on investment. Any person who places trades, orders or makes other types of trades and investments etc. is responsible for their own investment decisions and does so at their own risk. It is recommended that any person taking investment decisions consults with an independent financial advisor. Stonehill Forex Limited training courses and blogs are for educational purposes only, not a financial advisory service, and does not give financial advice or make general recommendations on investment.