SweetSpots Indicator For MT4
Table Of Contents:
- SweetSpots Indicator For MT4
- Trading ideas with the SweetSpots Indicator For MT4
- SweetSpots Indicator For MT4 - Support And Resistance
- SweetSpots Indicator For MT4 - Buy Entries
- SweetSpots Indicator For MT4 - Conclusion
The SweetSpots Indicator For MT4 automatically plots horizontal lines on round numbers (00 and 50). It has been typically observed that these round price levels tend to carry more importance than others. More often than not, an asset price will stop at round number levels to decide whether it wants to continue a move or reverse direction.
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Trading ideas with the SweetSpots Indicator For MT4
Going across your screen you will find that there are horizontal lines which specify certain sweet spot levels which are automatically drawn which have price points that end with double zero or fifty. The price levels which end with 00 at the end get a red horizontal line each whereas the price levels suffixed with 50 at the end get green lines as shown by the screenshot below.
SweetSpots Indicator For MT4 - Support And Resistance
These round-numbered levels are psychological support and resistance levels because traders from all over the world monitor these levels and as soon as price approaches any of these points many traders jump in to catch bounces off these points.
It may not be a complete reversal but it will just be a slight rejection and maybe the market might even continue following through with its initial direction. However, this may not always be the case - sometimes the market just goes right through this point without any resistance but most of the time these lines are deemed sweet spots from which you may trade off.
In a way, this indicator is just like the pivot point indicator which is a combination of support and resistance lines equally spaced out below and above the main pivot line using a different method of calculation such as Fibonacci. The only difference is that instead of using Fibonacci calculations or any other calculations, it just draws 10 lines on either side of the main middle line marking off the price points which end with double zero or 50 at the end.
So that gives you a total of 20 Lines specified. But when you notice that you do not have enough horizontal sweet spots being drawn for you in your screen - you could just adjust the default settings so that you can add more lines in by simply typing in a number greater than 10. In the image below, I opted to go for 20 lines so that it will have 40 sweet spot lines in total.
SweetSpots Indicator For MT4 - Buy Entries
As a word of caution, I would not look at trading the market by just using this as my only indicator to draw conclusive triggering points for opening up my trades.
So what you could do is maybe add in a Fibonacci retracement tool and then based on the recent price movement or price activity you could then choose to swing the Fibonacci retracement tool across the explicit down or up swings in the market. And then what you could do is then look for levels where the sweet spot levels come into confluence. The Fibonacci retracement levels that you may look at is the 61.8 ratio or the 78.6 ratio just like the picture shown below.
You will then see whether or not these levels are aligned with the different sweet spot zones. Using it in this manner gives you an added-confirmation to validate possible reversal trades. Furthermore, you can extend this prebviously mentioned use-case for your money management principles.
So what can happen is that the sweet spot levels can be used as zones to set your stop losses and your various take profit targets if indeed you have more than one trade open. This will just make your trade management more seamless and neat. Based on the Fibonacci mehod of trading - a buy trade was identified when the market reached the 78.6 level as it corresponded quite closely with one of the sweet spot levels.
This in turn formed a great buying opportunity because there was also a bullish engulfing pattern that had formed thus staking the odds in our favor. As the hours went by for the rest of the day, the market did indeed go up in line with our bullish outlook as shown below.
With a trading strategy like this it is paramount that you do not become to leniant or loose with your buying or selling decision making process. You need to remain consistent and disciplined. If you choose 61.8 confluence then go with that.
If you choose 78.6 confluence, then go with that. Just remain strict as far as your intended entry signal is concerned. These trade setups occur on all time frames therefore, you will never run out of trading opportunities. They are plentiful, so do not trade outside of your trading plan.
SweetSpots Indicator For MT4 - Conclusion
The SweetSpots Indicator is one of those really handy indicators which edify your trading processes in a way that is simple and effective. We used these various sweet spot lines as support resistance zones which were subject to validation.
We elected to use the Fibonacci tool to bring us the required validation by means of confluence. These levels either have to correspond with the 61.8 zone or the 78.6 region.
