Open Interest Online Indicator for MT4



Table Of Contents:

  1. Open Interest Online Indicator for MT4
  2. Some Advantages and Disadvantages of using the Open Interest Online Indicator for MT4

The Open Interest Online Indicator for MT4 is a tool for the Meta Trader 4 charting platform that is based on the support and resistance levels which are formed by the number of orders in the market at any given time. It is an indicator that is akin to the professional tool - Order flow which can be gotten on a monthly subscription.

This indicator helps traders to automatically spot the different support and resistance levels in the market, together with all the orders of the different market participants that make these support and resistance levels possible.

This is a tool that any serious trader should have and it has a lot of insights it offers to traders. Some of these insights are listed and discussed below.

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Some Advantages and Disadvantages of using the Open Interest Online Indicator for MT4

One of the major advantages of using the Open Interest Online Indicator for MT4 is that it can help the Trader to spot areas in price action where the price of a currency pair or trading asset is most likely to reverse. This means that the trader would know ahead of time when using this indicator at what prices that heavy orders exist.

These heavy orders are usually placed there by larger traders and some hedge funds or trading banks. These large orders usually have the ability to change the way that price is moving and likely reuse its direction on any timeframe where they exist.

When these prices exist below the price, they serve as a lower limit or floor for the price and when these prices exist above the price, they serve as a roof or upper restraint for price. This means that the trader using the indicator can quickly look at these orders to spot those likely areas in the market where these prices are likely to reverse.

This will help the Trader very importantly to plan ahead of the time for his trades, to fully prepare before he or she then takes the trade so that regardless of what the market does, it doesn't take the trader for granted since the trader easily understands the markets and knows exactly where his positions in the market should be and what he or she will do when the price gets to these positions in the markets.

Another very important advantage of using these levels is that it helps traders to identify support levels in the market. Support levels are those levels in price that are below the price.

They serve as a lower floor to stop the price from passing further down. Support le els are usually of varying strengths and this is completely dependent on the quantity and quality of the orders that are present at that price area in the market.

When the price approaches these support levels, it usually bounces back in the upward direction against its current direction and this makes these support levels a very important opportunity for the trader as he or she can immediately anticipate the price bounce and profit from it the moment that it happens. This is a leading indicator of what the price behavior will be at a given price.

Also, another very important advantage of using these levels is that it helps traders to identify resistance levels in the market. Resistance levels are those levels in price that are above the price.

They serve as an upper roof stop the price from passing further up. Resistance levels are usually of varying strengths and then this is completely dependent on the quantity and quality of the orders that are present at that price area in the market.

When the price approaches these resistance levels, it usually bounces back in the downward direction against its current direction and this makes these resistance levels a very important opportunity for the trader as he or she can immediately anticipate the price bounce and profit from it the moment that it happens.

This is a leading indicator of what the price behavior will be at a given price or will do at a given price. Traders can quickly gain very meaningful insights into what the playing fields in the market look like and this can then serve as a criterion for the growth of the trader throughout his or her trading career.

The trader using the Open Interest Online Indicator for MT4 is that it gives the trader very deep insights into the markets and exactly what the trading industry is built on.

This means that the trader would be able to know exactly when the prices are about to turn, where the prices are headed on any single timeframe, where the prices are most likely to react due to an increase in the orders at this particular level and what the trader can do when the prices get to these areas or levels marked by orders.

There are usually a couple of ways that the price interacts with these areas of Support and Resistance and these interactions are usually based on what the quality and quantity of orders at these areas look like.

Quality refers to the size of the trades that are placed at these levels whereas quantity refers to the number of individual trades that are placed at these price areas. Both of these metrics are very important in determining how well the price will react with an area.

The price when approaching a particular area will decide to do one of the following especially with respect to the size of orders in these areas. It may decide that at this particular area, it will bounce off the level because of the prices at this level in the reverse direction.

Are a lot, whereas it may also decide that it will break through a particular level because the orders in the opposite direction are not much and also because the orders in the direction of the breakthrough might be a lot compared to the orders trying to oppose the price from breaking through that particular area.

This way, the price easily breaks the area and keeps moving until the orders have dried up.

 

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