Coppock Indicator

The Coppock Indicator for MT5 is a classic oscillator developed by economist Edwin “Sedge” Coppock in 1965. Interestingly, the indicator was commissioned by the Episcopal Church to help guide long-term investment decisions in the stock market. Originally designed for opening long positions on daily charts, the Coppock curve is a smoothed momentum oscillator that helps traders identify buy opportunities over extended periods.

Although primarily intended for stock markets, the Coppock Indicator can also be applied to intraday forex charts, such as hourly or H4 charts. Its main line, typically colored green, is plotted below the price chart to provide visual momentum signals.

How to Trade With the Coppock Indicator

The classical trading signal of the Coppock Indicator occurs when the main line crosses the zero level from the bottom up. This crossover is interpreted as a BUY signal. Because the indicator is designed for long-term trends, positions are usually held for an extended period.

Classic Buy Signal

For example, in the USDJPY H4 chart, a long position would be opened when the Coppock line crosses above zero. Traders can close the position either on an opposite signal or according to their own trade management rules.

Sell Signal

Although primarily used for buying, the Coppock can also indicate potential sell opportunities. A sell signal occurs when the Coppock line crosses below the zero level from the top down. In the EURCHF intraday market, this would suggest opening a short position. Traders should place a stop loss above recent highs and watch for reversal signals that may indicate exiting or reversing the position.

Suggested Trading Approach

Apply the Coppock Indicator to your preferred timeframe.

Watch for the zero-level crossover.

Confirm trends using Price Action or additional indicators (RSI, MACD, moving averages).

Enter long positions on bottom-to-top zero crossovers and short positions on top-to-bottom crossovers.

Manage trades with stop losses at recent swing highs or lows.

Advantages of the Coppock Indicator

Provides both BUY and SELL signals.

No recoloring, ensuring consistent signals.

Free to use and easy to set up.

Simple settings suitable for beginners and advanced traders.

Can be applied on daily, weekly, monthly, or intraday forex charts.

Limitations

The indicator does not display arrows, requiring traders to manually monitor crossovers.

Originally designed for slower markets; in modern automated forex trading, additional confirmation is recommended.

Works best in combination with other trading methods and thorough testing.

Conclusion

The Coppock Indicator for MT5 is a versatile oscillator that smooths the momentum of the rate-of-change (ROC) indicator. While not necessarily the strongest standalone indicator for active trading, it can become an essential tool for trend-following strategies in both stock and forex markets. Used properly, it helps traders identify high-probability long and short positions while providing a clear visual momentum signal.

You can download the Coppock Indicator for MT5 for free at IndicatorForest.com to enhance your trading toolkit.