ATR Levels Indicator For MT4



Table Of Contents:

  1. ATR Levels Indicator For MT4
  2. Some Major Trading Insights and benefits of using the ATR Levels Indicator For MT4

The ATR Levels Indicator For MT4 is an indicator that is built specifically for traders who use the Meta Trader 4 for their trading analysis, charting of different currency pairs and trading assets, doing their technical analysis and making trading decisions all through the trading day as they work.

The ATR Levels Indicator For MT4 is based on the Average True Range indicator and is used specifically in order to identify the periods of support and resistance in the price.

The trader can easily gain a lot of trading insights from using the indicator as he trades every day and some of these trading insights and benefits are outlined and discussed very elaborately below.

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Some Major Trading Insights and benefits of using the ATR Levels Indicator For MT4

One of the first major advantages of using the ATR Levels Indicator For MT4 is that it automatically helps the trader to spot very important levels in the markets based on the Average True Range Indicator.

This means that the trader using the indicator can very easily be able to identify the major levels in the price where the market has the greatest potential to reverse during the trading day. These levels are drawn for the trader based on the range produced by the price at such areas in price.

This means that the price can very easily change their direction at these levels.
These levels are known as support and resistance levels. Support levels are those price areas below the price where the market has produced a sort of hindrance to the price breaking beneath it.

This means that the areas in the price of a currency pair or trading asset where the price has found it very difficult to go beneath or where the price action keeps on stopping continuously time after time are called support areas or support levels. These areas are very important to the trader as he or she can look to these areas in the future for potential;l reversal since the price already stopped at those areas in the past.

Resistance areas, on the other hand, are those areas in the price where the market has turned in the past and that is above the price. This means that resistance areas are formed in the price when the price keeps on stopping at a particular area or keeps on being stopped from breaking above a particular price area.

This may likely be due to the number of orders that are available at such price areas. once such an area stopped the price from going above it in the past, that area can very likely stop the price from going above it in the future. This makes such price areas very important as the trader can easily expect a price reaction at these levels no matter how little such a price reaction is, in the future.

This could then potentially help the trader to quickly set up possible trading areas for the future when the price action reaches these price areas. The ATR Levels Indicator For MT4 does not identify every area of support and resistance. It only identifies the major areas of support and resistance.

The major areas of support and resistance are selected based on specific criteria. The first one is the number of touches. This means the number of times that the price has previously touched that area in the past and reversed without breaking such a level.

Usually, the more the number of times that the price has previously touched an area and reversed without breaking the level, the more significant such a price area becomes as it becomes much stronger each time the price hits it and reverses without breaking out of it. Also, the more that the price hits such a level and reverses, the more that the price may move after it has broken through that particular price level.

This is very important and should be noted by the trader as one of the criteria for how to determine the strength of a level. The next criteria that should be noted by the trader in determining how strong a level is, is how volatile the price moves right after it hits those price levels.

This means that the trader also wants to see that the price has bounced off with a lot of force right after it touched any of the levels and that this has happened a lot of fo times. Usually, when it comes to major levels, the price reactions at these levels are usually very intense and volatile and this serves to tell the trader that such levels are very important and should be observed carefully in the future.

Also, once these kinds of volatile moves occur across the price multiple times at the same price areas, the trader should immediately take note of such price areas as there is likely to be a very strong reaction the next time that the price approaches any of these price levels.

Another very important thing to note about learning which levels are the support and which are resistance levels is that a major level can also be identified by the amount of space that the price gives before it goes back to bounce off of that particular level.

This means that for a major level, the price will most likely hit the price area, then reverse and move away for a long while before coming right back to the level to test it again. This should immediately give the trader an indication that the level is a major one in the particular currency pair that the trader is presently working on.

One last thing to note is that the trader must understand that when trading with major levels in the markets, once a major level is broken, that level immediately reverses its functionality in the markets. This means, for instance, that once a major support level is broken, it immediately becomes a major resistance level and as such, the trader must then expect a major market reaction at this point in the price charts.

 

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