Trading with the horizontal grid lines indicator on MT4
If you have been trading for a while, then chances are that you very well know how price behaves when it approaches a certain price point. For example, in the commodity markets, there is a big buzz created when price reaches a key level.
In the oil markets, you will find that news reports often create a hype when oil prices break the $50.00 threshold, or when gold prices reach the $1300 or the $1200 price levels. These are nothing but round numbers.
Round numbers are key levels of price point which are seen as a psychological barrier. Depending on where price is trading, the round numbers are key price levels where buy and sell orders are usually set.
But round numbers aren’t just confined to price levels such as 50, or 1300. Even in the currency markets, you will find that price level such as 1.1000, 0.8000 and so on behave the same way.
Keeping in mind the importance of the round numbers, it would be worthwhile to get an indicator which could automatically plot these levels. While one way to go about this is to use the horizontal lines to place these at the round number levels, it can get a bit tiresome.
If you are looking for a quick fix, then the horizontal grid lines indicator for the MT4 trading platform is a viable alternative.
Configuring and installing the MT4 horizontal grid line indicator
The horizontal grid line indicator is a customized indicator built for the MT4 platform. You can download the indicator from this article and install it to your MT4’s indicator folders. Restart your MT4 terminal and drag and drop this indicator onto the chart of your choice.
You will be presented with the configuration window as shown below.
MT4 Horizontal grid line indicator
As you can see from the above settings of the indicator, the customizations are quite simple.
Grid size in points: Using this setting, you can configure the number of points after which the horizonal grid line should be plotted. For example, if you set this to 100 points in a currency pair, that is about 10 pips difference. This means that for every 10 pips, you will see the grid line being plotted.
Grid colors: The grid colors although display two different levels, doesn’t work. You can change the color settings and it will automatically paint the grid lines based on the color that you choose.
Grid style and width: You can set the grid’s line style and width which allows you to customize the indicator and to match the style of your existing chart template.
Weeks: This setting is also redundant as once you select the grid size, the indicator plots these values across all time frames.
Show Label: By setting this to true, you will enable the horizontal grid line indicator displays the label. The label simply shows the grid size that you have selected.
Grid Label configuration: You can configure the font settings of the label that is displayed on the chart. You can change the color and the font size of the label which can be displayed on the chart settings if you enable the previous Show Label settings.
Label display configuration: The final three settings allow you to configure the label on which part of the chart it should show up on. You can place the label on the right, left side of the chart and using the right/down settings, you can move it to a convenient place on the chart where it does not interfere with your existing chart settings and indicators.
Once you have installed the MT4 horizontal grid line indicator, this is how it looks.
MT4 Horizontal grid line indicator
From the above chart you can see how simple this indicator is. It allows you to quickly add the grid lines every x number of pips or points on the chart. You do not have to individually set these grid lines using the MT4’s horizontal line drawing tool.
How to use the MT4 Horizontal Grid line indicator?
Trading with round numbers or clean price levels ending in zeros is a strategy in itself. Some traders, instead of entering trades at odd numbers prefer to set their orders to these round number values.
This is especially evident in the commodity CFD markets. The round numbers therefore, become key support and resistance levels. These are used as entry, exit levels in a trade. Depending on the time frame that you are trading, the horizontal grid lines remain constant.
Some traders might find the horizontal grid lines to be a bit too cluttered. Therefore, this is indicator might not appeal to everyone. It also depends on the type of market that you are trading and also your trading style.
The indicator can be applied to any chart and once the pip value is set, the indicators remain constant all across other timeframes. This allows traders a consistent view of the markets. It is advisable that you disable the MT4’s default chart background so that you only use these horizontal grid lines.
Because round numbers tend to play an important role they are often viewed as price magnets. If you observe price action carefully, you will notice that price tends to hover around the round numbers before setting the next leg in the direction.
You can also tweak your trading in such a way that you automatically adjust the support and resistance areas to smaller round number values in order to get a more cleaner view of the markets.
Having said the above, the horizontal grid line indicator for the MT4 platform is simply a cosmetic indicator. It doesn’t give you any major edge in the markets. Therefore, this is a tool that is more suited to give you the perspective of the markets than anything else. The good part is that you can use the horizontal grid line indicator as a tool that can complement your existing trading strategy.