Price Distribution Indicator For MT4
Table Of Contents:
- Price Distribution Indicator For MT4
- Some of the Major Advantages and Disadvantages of using the Price Distribution Indicator For MT4
The Price Distribution Indicator For MT4 is an indicator that was built for those traders who need to know what the prices where the most transactions occurred in any currency pair or trading asset during the trading day. The indicator was built for traders who use the Meta Trader 4 charting and trading platform frequently during the trading day to either chart the different timeframes of the different currency pairs and trading assets, to do their technical analysis and or to actively make important trading decisions during the trading day.
Traders who use the Price Distribution Indicator For MT4 will discover a lot of valuable trading insights during the trading day and will learn to understand how the price on any currency pair or trading asset swings around a focal point or cluster of favorable prices.
Some of the insights and advantages that traders can easily derive from using the Price Distribution Indicator For MT4 are outlined and discussed extensively below.
Some of the Major Advantages and Disadvantages of using the Price Distribution Indicator For MT4
One of the first major advantages of using the Price Distribution Indicator For MT4 is that it can help a trader to learn how the markets work as they oscillate around different prices during any trading day. The trader using the Price Distribution Indicator For MT4 will see that the indicator usually draws a vertical bar through a certain range of prices on the target timeframe that the indicator has been placed on or attached to.
This will then immediately serve to help the trader identify the most traded prices on any timeframe immediately. These prices which were the most traded prices are most likely to be very attractive points for the prices later on in the future. This is because, in the markets, the buyers and sellers are in a constant state of disagreement regarding which prices are fair, suitable or represent the right value for the currency pair or trading asset.
However, there are certain prices that traders, as well as investors, tend to briefly agree on and these prices become interesting points to the trader who has the indicator because he or she would be able to see that the prices often find a way to gravitate back to such points since these points were attractive points in the past. The Price Distribution Indicator For MT4 generally highlights such areas within a given range of time depending on the chart timeframe that the indicator is attached to during the trading day.
Once a trader spots these areas, he or she can then plan ahead for the times when the price comes around to these areas so that he or she can then easily take trades from these areas in real time because of how attractive those prices points were for the price in the past.
Another very important advantage of using the Price Distribution Indicator For MT4 is that it can very easily be combined with other trading strategies regardless of what kinds of trading styles or strategies the trader uses.
This means that the trader who has the Price Distribution Indicator For MT4 attached to his or her charts would still be able to use his or her own original trading ideas and strategies and would not need to remove the indicator before he or she would be able to do that as the indicator does not obstruct the trader's view of the price action and would certainly not obstruct the trader's view of his or her own indicators.
Also, using the Price Distribution Indicator For MT4 would generally improve the trader's trading decisions. This is because once the trader adds the indicator to his or her trading charts, he or she would then be able to identify those price areas where the prices are most likely to come back to during the trading day.
Once the trader identifies such prices, he or she would then be able to adjust his or her trading strategies and or trading ideas in such a way that the trader will only look for trades that are headed in the direction of those original areas where the prices were previously attracted to in the past. For instance, if the trader sees that the price is above the area, he or she would be looking for sells to take him or her back to the price area.
If the trader sees that the price is below the area of concentration indicated by the indicator, the trader would then look out only for buy trades that would then enable him or her to ride the price back to the area of concentration.
This would help the trader to avoid any other trades that would lead him or her away from these areas of concentration except the trader discovers that the current area of concentration has changed or that the price has moved too far away from the area of concentration during the trading day. The trader would also need to be aware of the risks that are inherent in trading and aware that the markets do not respect any individual trader and as such would not respect him or her.
The trader would also need to be aware of the fact that an excellent strategy coupled with a poor risk management strategy would definitely lead the trader to abysmal results whereas an average strategy coupled with an excellent money and risk management plan would definitely lead the trader to good returns or a not-so-bad level of returns. This way, the trader would understand that he or she needs to develop a plan to manage his or her trading risks.
Such a risk management plan would then be comprised of exactly what the trader is looking to do in the markets, the exact conditions where the trader would have to sit on his or her hands and not take a trade and the exact dollar amount or percentage of the trader's equity that the trader is willing to risk on any single individual trade. Once the trader can make the plan and stick to it, he or she is well on his or her way to trading success.