Lagrange polynomial Indicator For MT4
The Lagrange polynomial Indicator For MT4 automatically detects the minimums/maximums of the points and then uses them to create polynomial.
Trading ideas with the Lagrange polynomial Indicator For MT4
From a visual standpoint this indicator is extremely user-friendly because through the use of two different shapes it is able to tell you the nature of the market relative to determining the underlying market bias.
Lagrange polynomial Indicator For MT4 - Buy WIth A Smile
Essentially, buying gets a smile as shown in the image below.
By that, I am implying that before a bullish market comes into full swing - the turning point will resemble a smile hence why I equate smile-like shapes by the indicator to being a conducive state to buy. The polynomial-based indicator is basically showing you a smile. This smile means that the market has a minimum turning point, therefore, the market is most likely to head up.
The potential low or minimum level of the recent bearish activity is what is seen at the lowest point of the polynomial indicator as seen in the picture above. The blue circle shows that the market broke and formed an uptrend which could be the short-term and medium-term direction therefore buying would be a good choice with all the factors coming together in favor of a long-outlook.
Lagrange polynomial Indicator For MT4 - Resistance Curvature
The bearish scenario is slightly different but it shares a similar theme from an opposite perspective. More details are shared on this but it is also good to insert a picture in for you as I did below so that you can inherit a good understanding.
In bearish markets you get this resistance curvature shape which is formed by the indicator which is basically just an upside-down smile. Hopefully, you trade correctly to a profitable end which sees you consistently laugh to the bank instead. Nevertheless, upside-down smile it is then. In this situation, we see that the indicator is not smiling.
Instead, it is giving us a sad face which is forming a resistance curvature as I iterated before. It presents us with an opportune moment to sell with clear entry points and take profit targets. I have two blue circles drawn in. These two circles highlight the starting and midpoint levels of the polynomial or the resistance curvature line. In these blue circles are red dots so what I did was I drew in two red lines marking off these two red dots. The upper red line is going through the midpoint of the curve.
This level is our trigger point for our sell trade setup. As you can see the market has already broken through this level therefore I will open a sell with the take profit target set around 1.18134. What is fascinating is that this indicator can actually provide you with a new perspective on the market especially on the bigger time frames like the daily chart. In the next image, you can see that we are using the indicator to evaluate the market on the big daily time frame.
Similar to our previous example we had - we also see this resistance curvature - aka sad face - across the chart in the screenshot above. In this example, another sell entry is shown in the image above. But this is not just a sell entry - it is also giving us a long-term outlook which suggests that the market is going to sell off for weeks or even a month or so.
Therefore, if we are to open any trades in the near future on the smaller time frames then we will prioritize all those setups which are best suited for opening short positions. The resistance curvature is not the only selling point. The magenta line acts as the support trend line but the market has already broken this line and it retested the same line.
After the last retest, the market had just begun selling off therefore the market is most like heading down.
Lagrange polynomial Indicator For MT4 - End Of Sad Face
In certain situations you will find that the resistance curvature does not automatically mean you should sell. Technical analysis still holds considerable weight in terms of formulating your trade ideas so do not overlook its importance.
As you can see that we have another sad face but our analysis herewith points to buying instead of selling as shown in the image above. As you can see that the sad fac is huge and quite wide in terms of height. The recent downward spike in the asset is responsible for this big and high sad face.
What is interesting about this situation is that point two is lower than point number one as indicated in the diagram by the numbered circles. For the normal structure of resistance curvature, this is quite rare. This means that the asset has reached an extremely oversold region and therefore we should look at buying the recovery for the next week or two as the asset price started picking up momentum in an upward direction.
Lagrange polynomial Indicator For MT4 - Conclusion
What made this Lagrange Polynomial Indicator a really fun indicator to use is the fact it came with shapes which made technical analysis more approachable. This is one of the core pillars of indicators - they need to improve our trading analytic processes so that we can draw probable conclusions as to what is the next likely outcome in the markets.
This indicator certainly holds up to this notion and quality. It aided us to easily identify buying opportunities which usually come in the form of smiley-shape. Then, selling opportunities usually come in the form of sad-faces. But this is not always the case because just most indicators - you still need to do some of your technical analysis to be able to gain more reliable data on which profitable direction to trade in (which is the ultimate goal).
Nevertheless, it is paramount that you go ahead and jump into simulation before you actually introduce this trading tool into your real trading portfolio. It would be foolish to just jump in and start trading without having the necessary data to back your trading motives.