Three Indians Indicator for Meta Trader 4
Table Of Contents:
- Three Indians Indicator for Meta Trader 4
- Some Advantages and Disadvantages of using the Three Little Indians Indicator for Meta Trader 4
The Three Little Indians Indicator for Meta Trader 4 is an indicator that works on the Meta Trader 4 charting platform. It is built based on the Zigzag indicator and is used primarily to detect a hidden or unique trading pattern called the Three Indians trading pattern. Traders who learn to use this indicator will be greatly rewarded as they will several ways to improve their trading and pick up new skills. Some of the benefits of using the indicator will be discussed below.
Partially Automated Trading Besides Your Day Job
Alerts In Real-Time When Divergences Occur
Some Advantages and Disadvantages of using the Three Little Indians Indicator for Meta Trader 4
One of the major things to note about the Three Little Indians Indicator for Meta Trader 4 when a trader has decided to use it is that it does not produce trading signals and should not be traded on its own. A lot of traders practically pick up any new indicator or trading system they find on the internet with the hope that it might be that holy grail they have been searching for.
Turns out nothing is further from the truth as this since it makes traders believe that they can use anything to make money whereas the real challenge to making money is staring them in the face each time they look at a mirror. Such traders must understand that using some indicators is riskier than using other indicators and that this is one of the risky indicators to use and so shouldn't be used on its own.
This means that it should be used with other trading signals as well and the Trader must fully understand what he is up to before even deciding to use the indicator for trading. The Trader should do all the research he or she needs to do about a particular indicator before installing it on their charts.
Another important thing is to note is that although the Three Little Indians Indicator for Meta Trader 4 works on all timeframes, it works better on the higher timeframes like the 1 Hour and the other timeframes that are higher than the 1 Hour.
This is because except indicators are specifically built to be used for scalping or trading the lower timeframes of the market, they are likely to be susceptible to a lot of false signals fake moves that are rampant on the lower timeframes as a result of the price manipulations that are always evident on the lower timeframes. Hence any trader who intends to use the indicator must understand how it works and must be able to apply it to higher timeframes when trying to scan the charts for the trading pattern that this indicator helps them look for.
An advantage of using this indicator, however, is that although it may not give a trader actual entries signals into a move or o. A particular market, it can easily give a trader a general idea or overview of what the price action on any chart time-frame is doing at that particular time since it is constructed based on the Zigzag indicator that basically helps traders to map price action as it happens since it watches all the lows and highs created and identifies which ones are the major ones and which ones are the minor ones across piece.
The way the Three Little Indians Indicator for Meta Trader 4 works is that it helps the trader to identify the current critical market trend so the Trader can align their strategies to suit the ever-changing conditions in the markets at that particular time. It does this by looking for 3 consecutive highs in an uptrend or 3 consecutive lows in a downtrend.
The premise that the trading pattern is built on is that the price is most likely to reverse after making 3 consecutive highs or making 3 consecutive lows. Hence the indicator moves in the markets trying to identify these basic highs and lows for the Trader so that he or she will then find it very easy to spot market entries based on price movements and take advantage of them by usually using an additional indicator for confirmation that either tells the Trader whether a valid move is in place or not.
That kind of confirmatory indicator should most likely be a trend entry indicator or an indicator like the ATR stops indicator that will automatically tell the Trader how much space to leave for price to move based on the ATR on that particular trading so that traders are fully aware of how much space they should leave out for price action to move and how much space they shouldn't leave. There are 2 ways to use this indicator for trading.
The first way is to follow a continuation of its moves. This means that the trader would generally wait for the indicator to spot the first leg and spot the second leg before the Trader then gets in once the trend for the third leg is about to start happening with the intention of riding the third leg as it completes the pattern.
This is a less risky way of trading using the Three Little Indians Indicator for Meta Trader 4 as it allows traders to stay in the direction of the overall trend. The second-way to trade using the indicator is to use it to spot reversal moves in price. This is the more risky approach and of course, is more rewarding as when the signal actually works, the Trader will generally have a very nice risk to reward ratio trade on his or her hands.
Using the second method, a trader is supposed to wait for the third leg of the pattern to complete and then enter a trade in the opposite direction to the 3 consecutive highs or lows found by the indicator. This is done in hopes that the price will then reverse and give the Trader a very nice reversal trade. The Trader must make sure that they pay close attention to their money management strategy when using this indicator and make sure that they don't risk more than one percent on any one single trade.
