HP-COSMOS EA Manual: How to Use Technical Indicators > Notices

The technical indicators you meet in the HP-COSMOS settings are not devices that create entry signals. Their role extends only as far as filtering conditions to narrow down the candidates and measuring the stop loss width. Once that distinction blurs, no matter how many indicators you add, your judgment does not improve.

1. Separating the role of each indicator

The bands measure the range, RSI measures the mismatch in momentum, and ATR measures the width.

• Bollinger Bands — They draw the range of the current volatility. A section where the width has narrowed is only a hint that the move afterwards may become larger; it is not a basis for direction.
• RSI — It shows whether the market is overheated and where it diverges from price (divergence). Do not use it as a standalone basis for entry.
• ATR — It measures the current range of movement as a number. It is used to calculate the stop loss distance and the trailing width, and it does not tell you the direction.

2. The order for layering them

Instead of adding more indicators, arrange them so that their roles do not overlap.

• Step 1, direction filter — On the basis of the trend, decide whether to look only at buy candidates or only at sell candidates.
• Step 2, condition check — Check the band contraction and the break out of it, and RSI overheating and divergence.
• Step 3, stop loss width calculation — Measure the range of movement with ATR and decide the stop loss distance and the size.
• Step 4, recording — Write down which conditions you used for this trade. If you do not write it down, you cannot verify it.

3. Frequently seen misuses

• Adding indicators without stopping — You are only looking at the same information over and over under a different name. When the roles overlap, it stops being confirmation and becomes self-conviction.
• Fitting the period setting to the result — Finding a value that fits the past well is a different thing from one that stays valid going forward.
• Using overheating as a basis for a counter entry — In a strong trend, the overheated zone holds for a long time.
• Setting the stop loss with indicators alone — The structure decides the stop loss, and ATR is an auxiliary means of measuring the width.

Every indicator is calculated from past prices. Use them on the premise of that limitation: they do not predict the future and always react after the fact.

This is community educational material and is not investment advice, a personal recommendation, or a solicitation to trade. The conditions organized here are conceptual explanations, and the actual behavior and setting values have to be checked against the version provided and the configuration document. No rule guarantees a profit, a loss limit, or execution at the intended price.