RSIColored_v1 DivPeakTroughRSI_SW Indicator For MT4
Table Of Contents:
- RSIColored_v1 DivPeakTroughRSI_SW Indicator For MT4
- Some of the Advantages and Disadvantages of using the RSIColored_v1 DivPeakTroughRSI_SW Indicator For MT4
The RSIColored_v1 DivPeakTroughRSI_SW Indicator For MT4 is an indicator that is built on the Meta Trader 4 charting platform and that is built based on the Relative Strength Index indicator whose primary function is to help traders to detect the periods in the market when there is strength and the other periods when there is no strength in the markets.
This means that the indicator can help traders a great deal not just to figure out when a market is moving with strength but also when there's no strength in a move and when that kind of move is likely meant to lure traders in and turn to the reverse direction.
Traders can derive a lot of insights when they use the indicator and some of these insights and advantages are outlined and discussed below.
Some of the Advantages and Disadvantages of using the RSIColored_v1 DivPeakTroughRSI_SW Indicator For MT4
One of the major advantages deserving of the first mention that the trader can immediately derive from using the RSIColored_v1 DivPeakTroughRSI_SW Indicator For MT4 is that it can help the Trader to quickly detect the strength level in a market.
This means that the trader will be able to look at any market using the indicator and immediately identify and understand those periods that the price moved with a great deal of strength in it, those other periods that the price did not move at all because there was no strength in the markets and those times when there was no strength in the move but the market still faked a move to lure retail traders in and reverse on them.
This helps the trader by giving him or her a road map to what the market is doing at any given time and price and then once the trader understands what the market is doing, he or she can then benefit from the market move by participating in it.
These periods that there is no strength in the market and yet the market fakes a move are known as price divergence periods. This means that usually, the price moves in the same way that the indicator does. Hence, when the price makes higher highs, the indicator also makes higher highs and when the price makes lower lows, the indicator also makes a lower low.
The indicator can then be used by the trader to identify exactly when there is no strength in the move since the indicator will not print a higher high with price or a lower low with price and will generally move in a different direction from price to show the trader that there is no strength currently in the price move.
The Trader can then capitalize on this opportunity to take a trade in the reverse direction, betting that the market will reverse based on the weakness expressed by the indicator and can stake a small amount on this bet in case it does not work out as planned some several times in the market, trader plans do not always work out the way they should especially when the Trader needs to reduce their risk to be able to fully capitalize on the market move.
Another major advantage of using the RSIColored_v1 DivPeakTroughRSI_SW Indicator For MT4 is that it helps the trader to identify entries and exits in the market.
This means that the trader can easily detect opportunities in the market where he or she can both buy and sell in the markets based on the interactions of the market with the indicator. This is beneficial for the Trader because he or she can then spot these opportunities to make profits and take full advantage of them.
Also, these points identified by the indicator can also serve as exits points for the Trader since they are likely points where the market might reverse prices in another direction.
This way, the Trader can immediately spot where he or she should get into the market and where he or she should likely leave the market and then be able to make some profits from it.
This also helps to keep the trader very organized as the trader already knows where he or she will leave the markets and exactly what to look out for before he or she takes trades in the markets.
This will generally help the Trader to stay organized and focused as a result of the markets. Traders can then look to finding these opportunities for entry and exit and stay ahead of the other traders.
Also, the RSIColored_v1 DivPeakTroughRSI_SW Indicator For MT4 is very easy to understand and can be used by all the different classes and skill levels of traders.
This is because the indicator employs very appealing graphics in displaying the movements or variations of price strength in the market and even draws in lines to tell the Trader when he or she needs to get into the trade since the trader needs to be fully aware when there is an opportunity as a result of the indicator to make some money in the markets.
Traders who use the RSIColored_v1 DivPeakTroughRSI_SW Indicator For MT4 need to make sure that they practice very safe money and risk management plan as this will help the traders stay safe in the markets even though the amount that they risk keeps growing.
Hence the trader must set a plan in place first before he or she starts to take any trades. The first step is usually to determine exactly how much the trader will risk in each particular trade in the market.
This means that the trader would need to carve out a certain percentage of their account that the trader is willing to lose per trade as the trader places trades.
This will keep the trader safe and confident in the fact that he or she would only lose a limited amount in the markets no matter what happens and because of this, the Trader would immediately be able to learn how to take trades with more and more confident and less and less of distractions or uncertainty in the markets.