The H2 H3 H6 H8 H12 Candlestick Indicator
The H2 H3 H6 H8 H12 Candlestick Indicator is a metatrader 4 indicator uniquely suited to both forex beginners and advanced traders. The H2 H3 H6 H8 H12 Candlestick Indicator is considered a trend following indicator since it allows the trader to see what's going on with the larger time frames at any point in time.
For instance, if a trader's time frame is the 1 Hour (H1), the trader can then add in the H2 H3 H6 H8 H12 Candlestick Indicator to see what is going on on the 4 Hours(H4) time frame, or the Daily and weekly time frames at the same time.
How The H2 H3 H6 H8 H12 Candlestick Indicator Works
The H2 H3 H6 H8 H12 Candlestick Indicator works by superimposing candles of whatever larger time frames the trader selects on the time frame the trader is currently working on. That way, the trader has a dual view of what the market is doing from a broader point and from a more specific point of view.
This can greatly help traders to avoid entering trades that are against the higher time frame trends and encountering very large losses as a result of huge sudden spikes in price due to the trend resuming it's original direction.
This can also serve as a powerful tool for traders to enter trades in only the direction of the larger, more powerful time frames, and stay much longer in trades, riding the longer time frame trends for much more profit as compared with exiting at the slightest reversal or retracement. Swing traders can especially profit from using the H2 H3 H6 H8 H12 Candlestick Indicator.
Scalpers can also profit from using the H2 H3 H6 H8 H12 Candlestick Indicator by merging, for instance, the four hours and one hour on one chart and going down to the 5 minutes and taking only trades where the 15 minutes candles and five minutes candles are in the same direction of the 4 Hours (H4) and 1 Hour (H1) time frames.
Advantages of using the H2 H3 H6 H8 H12 Candlestick Indicator
One of the major advantages of using the H2 H3 H6 H8 H12 Candlestick Indicator is that it allows traders to stay longer in trades and to take trades that are in the same direction as the larger time frame trend. The H2 H3 H6 H8 H12 Candlestick Indicator also allows traders to see the larger time frame trend easily and also allows traders to pick trades according to the trend.
With the H2 H3 H6 H8 H12 Candlestick Indicator, it's easy to see when price is resting, when price is strongly trending up and when price is slowing down to a reversal.
Some Trading Ideas using The H2 H3 H6 H8 H12 Candlestick Indicator
One way to use the H2 H3 H6 H8 H12 Candlestick Indicator would be to for breakout trading. The trader would need to look out for when there is candlestick compression between both of the time frames on the chart, this is, the current time frame and the superimposed higher time frame by the H2 H3 H6 H8 H12 Candlestick Indicator.
This price compression usually makes the compressed candlestick area look like a flat compressed surface, usually characterized by small candles of both the larger and smaller time frame forming a range and trading within it for a few sessions.
This is usually an indication of a big move in the immediate future since most of the time such compression usually happens before big moves occur. For example, a trader could watch for when there is a compression between the 1 Hour (H1) candles and the 4 Hour (H4) candles.
When the trader spots such a compression, the trader can then take trades in the direction of the breakout. The trades can then be continued until price changes to a new direction or until a new compression occurs.
Swing traders as well as scalpers would need to be aware of the price compression and watch for when they happen, since a big price continuation move or reversal move might be about to occur. Also, watching for this price compression is another way to use the H2 H3 H6 H8 H12 Candlestick Indicator to exit trades in profit.
For example, if a trader is currently in profit and a compression starts to happen, it's advisable for the trader to take a part of their profit and leave a little part running, or to close the position completely depending on what their trading style and strategy is.
One of the other ways to use the H2 H3 H6 H8 H12 Candlestick Indicator would be as the main exit method. The H2 H3 H6 H8 H12 Candlestick Indicator can also be used as a standalone exit method or integrated as a part of an already existing system.
Using the H2 H3 H6 H8 H12 Candlestick Indicator as an exit method works by connecting the lows of the bigger time frame candles in an uptrend or connecting the highs of the bigger time frame candles in a downtrend.
For example, a trader in a buy trade in the pound yen (GBPJPY) pair 1 Hour (H1) time frame can connect the lows of the 4 Hours (H4) candles superimposed on the 1 Hour (H1) candles during the uptrend using the H2 H3 H6 H8 H12 Candlestick Indicator, to make sure he or she stays in the trade long enough to make as much profit as possible from the trade.
The trader then leaves the trade once the market breaks the trendline or once the market changes direction depending on what kind of trading system or strategy he or she might be using.
A better but slightly more complicated way to use it would be to keep using trend lines to connect the lows of the superimposed candles during an uptrend or to connect the highs of the superimposed candles during a downtrend until the trend lines almost become flat. At this point, the trader should exit the trade.
This way, the trader doesn't get knocked out by the retracement of the 1 Hour (H1) candles but stays in the trade until the superimposed 4 Hour (H4) candles decide to retrace which may likely result in a deep price retracement or large drawdown for the trader.