Colored Price Channel Indicator For MT5
Table Of Contents:
- Colored Price Channel Indicator For MT5
- Trading ideas with the Colored Price Channel Indicator For MT5
- Colored Price Channel Indicator For MT5 - Buy Entries
- Colored Price Channel Indicator For MT5 - Sell Entries
- Colored Price Channel Indicator For MT5 - Conclusion
The Price Channel Indicator For MT5 is a special version of the donchian channel that draws a colored zone/channel on the chart. You can use the indicator to detect overbought and oversold conditions as well as deep pullbacks to enter in direction of the trend.
The Colored Price Channel Indicator For MT5 is a very advanced indicator that creates an upper and lower boundary for the trading instrument. People who have been using the indicators which create a simple price channel often get confused as they don’t give any importance to the market slope.
Giving importance to the slope of the boundary line is very critical to your success. In fact, without analyzing the slope of the Price Channel indicator, no one should expect to execute profitable trades. Some of the retail traders often ignore the mid-band of this indicator. But the mid-band is often considered as the profit-taking zone for the short term traders.
Unless you are taking the trades in the higher time frame and looking for long term profit, you must know the use of the mid-band. Before you illustrate the proper use of the mid-band, we need to highlight the importance of the trading edge. Some retail traders blow up the trading account as they don’t have a perfect edge. By integrating the price channel indicator with a faulty system, you will make things worse. The trading system must have a win rate of over 65% and only then you can expect to make a decent profit.
Trading ideas with the Colored Price Channel Indicator For MT5
People who have years of experience knows the perfect way to select their trading method. They strategically do all the things and earn a decent profit. Since this article is going to act like a complete guide, we will tell you the exact way to find the potential edge. The system that you will be using should be the focus on a higher time frame trading method.
By choosing the higher time frame in the trade execution process, a trader can easily improve their trade edge. The colored channel gives us two important metrics about the market. First of all, you will get a general idea about the direction of the trend. Secondly, you can identify the key support and resistance level.
Though it might seem tough if you merge the SR level of your edge with the indicator signal lines, you can get a very accurate reading. While doing so, you may get confused and try to work with different tactics. But this will never work. A well-structured trading method is a must to take advantage of this Price Channel indicator. Now let’s learn how we can.
Colored Price Channel Indicator For MT5 - Buy Entries
When you buy an instrument, you have to find the potential buying zone. To locate the buying space in the trading instrument, you have to look for the classic support zone. This can be determined by using support levels in the higher time frame. If the trading system focuses on the indicators too much, you might have some trouble in determining the key spot for trading.
In that case, you have to revise your trading method to improve the edge and this will help you to find the important buying zone. As you find the critical support zone with the help of the edge, you have to look for the support line of the colored price channel indicator. The rejection in the price should take place at the bottom magenta color line.
The slope of the channel in the Colored Price Channel indicator should positive or it should show a steady rise. The rising slope tells us the price is in the uptrend and the asset is most likely to move to a new high. Evaluate the Sl and TP levels so that you don’t have to open the trades with an imbalanced risk to reward ratio.
Colored Price Channel Indicator For MT5 - Sell Entries
The short trades get triggered when the traders find the potential selling zone. To find the desired selling level, a trader has to look for the critical resistance level. The resistance zone should be marked in a higher time frame. Make sure the trading method which you are using is capable of finding the perfect selling level in the instrument.
A strong resistance should have a cluster of candles above the high. The price should have a tough time to break above that level. The channel drawn the colored price channel indicator will give you an important clue about the quality of the resistance. If the selling zone is strong, the top part of the channel will merge with the resistance.
The bearish rejection will take place right at the channel resistance. Analyze the risk to reward ratio and evaluate the state of the market. In case the price movement is stable, you can risk 3% of the balance. If not, you should risk only 2% of the account. But never increase the risk as it can create massive confusion. You can also learn the key technique of using the colored price channel indicator by using the demo account.
Colored Price Channel Indicator For MT5 - Conclusion
The smart traders in the Forex market never use the colored price channel indicator as the prime tool. To them, this indicator is nothing but a helping instrument. If the support and resistance level merge with the channel resistance or support, the traders get more confidence to take the trade.
However, the colored price channel indicator reading is not always accurate. At times, you will notice the price is breaching these levels. These are the times when the major news is being released. So, if you manage to keep yourself tuned with the high impact news, chances of losing trades due to false price fluctuations or sudden change in the trend are very low.
Explore the safe approach in trading and try to evaluate the risk profile from different perspectives. Trade within your comfort zone so that you don’t have to blow up the account. Though the colored price channel indicator is a perfect tool to evaluate the price movement, you have to be careful about the selection of the news. As you find the perfect balance between the news factors and the use of the trading method, it will be an easy task to secure profitable trades in the market.