Ask Shadow Indicator For MT4



Table Of Contents:

  1. Ask Shadow Indicator For MT4
  2. Some Advantages and Disadvantages of using the Ask Shadow Indicator For MT4

The Ask Shadow Indicator For MT4 is a tool that measures the difference between the Bid and Asks prices on a particular currency pair. The Ask Shadow Indicator For MT4 display this difference between the Bids and Ask prices in the form of extra wicks on the top of each candle produce by the price.

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Some Advantages and Disadvantages of using the Ask Shadow Indicator For MT4

The Ask Shadow Indicator For MT4 mostly display on the 5minutes and 1minute timeframes because on the 15minutes this difference between the Bid and Ask price is too small to be visible.
Traders can watch this indicator on the lower timeframes on any currency pairs in order to identify when the price momentum has increased or reduced. For instance, for currency pairs like USDCAD, within the Asian session because the US Dollar is not actively traded the momentum in that currency pair is usually very low.

The trader can easily spot this when using the Ask Shadow Indicator For MT4 because the wicks formed by the indicator are easily smaller around that time of the day and generally becomes longer as the momentum of the prices increases when other markets like the London market and the New York open.

This will allow the trader to know when to expect quicker and more volatile reactions and know when the price actions may be slower. This knowledge will allow the trader to set proper stop loss sizes regardless of the time the trader set it during the trading day.

Another way the Ask Shadow Indicator For MT4 can be profitable to the trader is that it can allow the trader to know when an economic event is currently taken its toll on the price of any chart that the indicator is attached to by the trader.

For instance, on any Dollar-related currency pair, the Bid-Ask spread will drastically increase when an economic event like the FOMC is announced.

The trader who has the indicator attached to his or her trading chart will generally notice that the wick produced by the Ask Shadow Indicator For MT4 will be multiple of times longer than it usually should be to indicate to the trader that the spread on that currency pair at that moment in time is very large.

At such times, the trader would generally need to avoid such currency pairs as he or she would get very unfavorable price spreads if any trades are placed as also indicated by the Ask Shadow Indicator For MT4.

If the trader must place a trade as such times, he or she would need to attach an indicator like the Average True Range to his or her charts and use its value to correct measure the actual Stoploss size that would be okay for the current market condition on his or her trading chart.

Usually, the trader would only need to take the current ATR value at that time and multiply by a value above 1.5 in order to set a distance that can allow the price enough room to move in favor of the trader if his or her trades are placed correctly.

 

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