Price Channel Indicator For MT4
Table Of Contents:
- Price Channel Indicator For MT4
- Some of the Major Advantages and Disadvantages of using the Price Channel Indicator For MT4
The Price Channel Indicator For MT4 is an indicator that was built based on the raw price action and on the Average True Range indicator which is also built for the Meta Trader 4 charting and trading platform.
The Price Channel Indicator For MT4 was also built for the traders who use the charting platform to do all of their technical analysis during the trading day, who do all of their charting of the individual timeframes that make up the trader's preferred choice of currency pairs or trading assets and also those traders who use the charting platform to actively make trading decisions during the trading day.
The traders who use the indicator can easily use it to identify the current price trend direction on any timeframe of any trading asset or currency pair that the indicator is attached to. The indicator can also be used to identify the periods that the price is very fast paced and to derive a lot of other trading insights during the trading day.
Some of these trading insights and advantages that a trader can easily derive are outlined and discussed extensively below.
Some of the Major Advantages and Disadvantages of using the Price Channel Indicator For MT4
One of the first major advantages of using the Price Channel Indicator For MT4 to the trader using it is that it can help him or her to identify the general price trend in any timeframe of any trading assets or currency pairs that the indicator is currently attached to during the trading day.
This means that the indicator can help the trader who has it attached to his or her trading charts to identify the direction that the price action is headed on whatever timeframe or chart that the trader places the indicator on. This is very important for so many reasons.
One of the reasons is that it can help a trader to know which direction he or she should place his or her trades. It has been statistically confirmed severally that the reason several traders often lose their trades is that they often get in at positions that are against the general direction of the market trend, In other words, the traders do not place their trades with the recognition that there is an already existent market trend that needs to be observed and this makes the trader place their trade is whatever direction they think is the right direction for the trade.
This then makes the trader enter the wrong direction most of the time and then end up having the price go against him or her much more than it will go in the trader's favor. It is very important because a trader who must make profits from their trading must be able to identify exactly what the general direction of their chose currency pair is on several timeframes before they begin to take trades in the said direction. This will then help the trader to be on the right side of the market move.
Usually, ideal market moves are always in the direction that the market has chosen to move in and a trader must ensure that he or she understands what this general market direction is on the timeframe that he or she will be making trades on and also on the higher timeframes as well.
Once the trader understands this, he or she will then be able to align his or her trades in other to suit that general market direction that the trader has identified. When the trader then places trades in this general market direction, it becomes very possible to follow a market move and not have the market move against the trader by a lot. Market moves are comprised of waves in both directions of the market. The bigger waves are usually in the direction that the market wants to move to since the price has to get to a specific area in that direction.
When the trader identifies such a direction, he or she then automatically position himself or herself to be able to take advantage of the market move in that direction and also to avoid being at the detriment of such larger market moves. This way, it then becomes possible for the trader to make profits since he or she will always be in the right position for the trend to move in his or her favor actively during the trading day. The trader will be able to identify the general trend direction using the indicator using the following process.
Firstly, the trader has to place the indicator on a higher timeframe. Once the trader has placed the indicator on a higher timeframe, he or she will then be able to see which direction of the channel or which side of the channel that the price is currently leaning into. This should then give the trader an idea of the direction of the price on that higher timeframe.
Next, the trader can then add the indicator to his or her trading chart. Once the trader adds the indicator to his or her trading chart, he or she should also look out for the side of the channel that the price is leaning into. If the price is leaning into the upper part of the channel, it is currently trending upwards whereas if the price is leaning into the lower side of the channel, it is currently trending downwards. The trader can repeat this process as many times as he or she likes on as many higher timeframes of the currency pair as possible so as to get a general sense of the direction of a currency pair.
Once a trader finds that the general direction is the same on several timeframes of the currency pair, he or she can then take advantage of this as such times are the ideal times for the trader to place trades in such directions of the charts as such directions will generally make the trader immediate profits if he or she aligns his or her trades in such directions.