Pattern Indicator For MT4
Table Of Contents:
- Pattern Indicator For MT4
- Trading ideas with the Pattern Indicator For MT4
- Pattern Indicator For MT4 - Trade A Few Patterns
- Pattern Indicator For MT4 - Trend continuation And Reversal Entries
The Pattern Indicator For MT4 detects and display the following candlestick reversal and continuation patterns on a price chart: 1. Hanging Man 2. Hammer 3. Morning Star 4. Marubozu 5. Abandoned Baby 6. Evening Star 7. Dark Cloud Cover 8. Engulfing 9. Harami 10. Piercing 11. Three White Soldiers 12. Shooting Star 13. Doji
Trading ideas with the Pattern Indicator For MT4
When traders burst onto the scene, one of the starting points in the market is to do technical analysis. Technical analysis is one of the most popular ways of trading the market given the fact that how the market responds and obeys to various price structures which are known as price candlestick patterns.
However, there are so many candlestick patterns that you need to be mindful of when you are trading. Therefore, it becomes overwhelming especially if you are a new trader or an average trader.
Hence why this indicator was created because it actually recognizes the patterns for you. Each pattern that it picks up on, based on its settings, will then label them across your screen as shown by the picture below. All candlestick patterns that are recognized are labeled in red.
This indicator saves us a lot of time because we do not have to dedicate so much focus on detecting various candlestick patterns. This will free up time for all the other aspects of technical trading such as trend analysis and even a bit of fundamental analysis.
Pattern Indicator For MT4 - Trade A Few Patterns
As mentioned in the introduction, this candlestick pattern indicator recognizes up to 13 candlestick patterns. There is no need to treat every candlestick pattern as a trade signal because it will induce a lot of risk in your trading as you will be entering into trading positions that are not always backed by concrete confirmation.
Therefore, it is considered wise to rather trade a select few patterns instead and then build your account using the selected patterns. We will touch on a few screenshots and trading examples that show you what to do if you are just going to trade a few patterns only. I am going to present to you the Marubozu pattern.
This is a unique candlestick pattern because a marubozu candlestick pattern is one that forms without the existence of a candle wick or shadow on either side of the candlestick. In simpler terms, that just means that if you have a bearish Marubozu candlestick and then the high and the opening price of the bearish morubozu candlestick will be equal and the low and closing price of the candlestick pattern will have the same price.
Also when there is a bullish marubozu candlestick, you will have the opening and the low prices being equal whereas the high and the closing price of the bullish marubozu candlestick will be equal. But the verification and detection is automatically done for you through the use of this indicator.
Pattern Indicator For MT4 - Trend continuation And Reversal Entries
The Marubozu pattern is actually both a trend continuation pattern and it can also be used as a reversal pattern. It just all depends on the market context. Below, I have an example showing you what Marubozu pattern trading opportunities look like in both trend continuation and reversal trading market contexts.
In the image above you can see that the market is in a strong uptrend before a marubozu pattern was formed. In this case, it was a long bullish marubozu candlestick which formed, and even though after the pattern was formed there was bearish pressure applied by the sellers to force the market in the opposite direction but that was to no avail.
Therefore, with a slight retracement completed, the market continued to trade up. This shows the amount of influence the marubozu candlestick pattern has when it comes to perpetuating an underlying trend. However, it can also be used as a reversal candlestick pattern as shown in the image below. Referring to the image below, the market was in the downtrend. At the mature or last phase of the downtrend there was a marubozu candlestick pattern which formed.
In this in this scenario, it is deemed as a reversal candlestick pattern because what happened after this bullish marubozu pattern, the market broke out of this downtrend to form a new uptrend.
This just shows the level of discernment you need from a technical analysis standpoint because you need to understand the context of the market whenever you come across a marubozu candlestick pattern. With the examples I mentioned above, I gave you two examples. One example was a trend continuation situation and the other one was a reversal candlestick situation.
Therefore, it just shows you the importance of unraveling the market context so that you know how to best proceed forward whenever the indicator presents a marubozu candlestick pattern to you. This way of trading should be a standard procedure for most of the candlestick patterns that this indicator shows you in the context of identifying opportune trading moments.
Meaning that the market context in which you would identify a candlestick needs to be worth pursuing when wanting to officially follow-through with a trade.