Day Trader Market Profile Indicator For MT4
Table Of Contents:
- Day Trader Market Profile Indicator For MT4
- Advantages and Disadvantages of using the Day Trader Market Profile Indicator For MT4
The Day Trader Market Profile Indicator For MT4 is a free tool specifically built for the Meta Trader platform which is used for trading the short term and the long term timeframes. The indicator uses the price of a trading asset and the volume of that trading asset to create a new kind of chart that combines and displays both the timeframe, the price of the trading asset and the volumes traded on one chart for the trader to see.
Partially Automated Trading Besides Your Day Job
Alerts In Real-Time When Divergences Occur
It is very important to understand how this tool works as it is a very essential but vastly unknown and underrated tool to traders worldwide. It usually works by analyzing a previous market day for the trading range developed together with the area of the price that held the most values during the trading day. This area is usually called the value area.
In any market profile indicator, the trader must quickly understand that the key factor to grasping how it works is by understanding volume. During the trading day, price usually creates an equilibrium position.
This equilibrium position is the point where price comes back to several times during the trading day. It is usually where the majority of market orders are clustered during a trading day. Usually, once prices start to drift far from this value area of equilibrium, the volume in the trades will naturally start to diminish and the probability that the price might return back to this equilibrium point increases drastically. This composes the market profile for the next trading day.
The Day Trader Market Profile Indicator For MT4 helps a trader to accurately decide where a trade should be placed and what trends to take part in during each particular trading day. This is because not every market or trading asset will have a trending day and the trader only needs to be in one of the trending markets to make sufficient profits for the trading day.
Trading with the Day Trader Market Profile Indicator For MT4 has a whole lot of advantages and Disadvantages as we will outline below.
Advantages and Disadvantages of using the Day Trader Market Profile Indicator For MT4
Using the Day Trader Market Profile Indicator For MT4 requires that the trader first be willing to part with a substantial amount of time since learning any technical analysis method requires a lot of the time on the trader's part. Naturally, learning to use the market profile chart will require that a trader is willing and committed to keeping to learning during the very steep learning curve while trying to learn to use the indicator. The trader would need to be very patient as the ability is graduated over time as the trader becomes more and more aware of how the market profile indication works.
However, a major advantage of using the market profile chart is that it presents market information in an entirely different way that makes it easier for the trader to understand price action, including the right places in price to place a trade, and whether or not a particular market should be traded or not for that particular trading day. This will naturally enable the trader to avoid entering trades in markets that do not have enough volume to move them or entering trades at areas that will let price action move against the very easily.
This Day Trader Market Profile Indicator For MT4 is very stable on the Meta Trader 4 platform. It, however, freezes up a bit when the trader tries to change timeframes when using the charts so the trader needs to be very patient with the indicator while using it. It also clogs up the charts and asides from horizontal and vertical lines, adding any other tools or indicators would be highly advised against as the trader may most likely get that this makes the chart look unbearable and ugly.
Also, with the Day Trader Market Profile Indicator For MT4, it is easier for the trader to see or determine what the major trend direction is, however, this requires a lot of practice and concentration and the trader would need to really work hard at it before they get a hang of how it entirely works. It also enables the trader to detect trends faster and then they can work to take advantage of the trend as it develops.
It is very important to note that a trader must be very strict regarding how they take risks especially when they are trying to learn how a new technical analysis tool works. This is very important since it is very easy for a trader to get carried away by how well a tool is performing and begin to risk too much on a single trade. The ideal amount of risk any trader should take per trade should be about 1 to 2 percent if their entire account per trade as this will help the Trader to survive when the market decides to give the traders a lot of losses.
The Day Trader Market Profile Indicator For MT4 can be used on all timeframes on the Meta Trader 4 regardless of what the trader wants to use it for since it still displays all the required information on any timeframe it is placed on. This helps the trader to use it for any timeframe he or she needs it for. It should also be noted that we recommend that traders use this tool on the one-hour time frame since that way, a trader can see all the market information for the past several days and then understand to a larger extent what the price action has been for the past couple of days.
That will, in turn, enable the trader to align their expectations and trading ideas during the trading day so that they can take trades in line with how the price has been moving or working out several days. The trader, however, is at liberty to choose which timeframe he wants the tool to be used on while he trades.
