Cycle Period Indicator For MT5
Table Of Contents:
- Cycle Period Indicator For MT5
- Trading ideas with the Cycle Period Indicator For MT5
- Cycle Period Indicator For MT5 - Buy Entries
- Cycle Period Indicator For MT5 - Sell Entries
- Cycle Period Indicator For MT5 - Conclusion
The Cycle Period Indicator For MT5 is inspired by the work of John Ehlers in 2002. The goal of this indicator is to highlight market cycles which are not always visible on the price chart alone.
Partially Automated Trading Besides Your Day Job
Alerts In Real-Time When Divergences Occur
The Cycle Period Indicator For MT5 is a very systematic filter mostly used by the advanced traders. But due to its easy features, novice traders are also using this indicator as to their prime trade filter tool. Witold Wozniak developed this indicator in such a way so that the retail traders can take advantage of the price periodicity.
The core algorithm for the Cycle Period indicator is also based on the Fisher Transform formula and thus the short time frame traders can easily take a reading from this tool as there will be lagging issues. The price movement is processed by this advanced indicator and then a red signal line shows the trend direction by its slope. Let’s say, the red signal line is rising after reaching the bottom portion of the indicator panel.
Such a rise in the Cycle Period indicator signal line tells us the bulls are getting strong and execution of the long trade is a perfect decision. But to improve your trading performance, you have to focus on some strategic actions. For instance, you need to select your trading method in a very selective way. And then you need to take the data from the Cycle Period indicator. If you become more concerned about indicator reading, you will have deviated away from the core function of this tool.
Trading ideas with the Cycle Period Indicator For MT5
The classic indicators are very famous among professional traders. For instance, if you ask about the overbought or the oversold state, the retail traders will install the stochastic or the RSI to give you the answer. But when you rely on the Cycle Period indicator, you need to be concerned about your trade execution.
The trading method must be structured and capable of finding premium trade signals. Before you move to the use of the Cycle Period indicator, you need to ask yourself about the win rate of your edge. If the win rate is less than 73%, you need to revise your trading strategy. There is no use in integrating the Cycle Period indicator into a weak trading method since you won’t be able to filter out the good trades.
This indicator is nothing but a filter tool. Unless you have strong analytical skills in determining the premium signals, you should not use a trade filter. To learn more about your trading method and the integration of the Cycle Period indicator to your system, you can also use a demo account. Now let’s see how the elite traders are using the Cycle Period to take a long and short trade.
Cycle Period Indicator For MT5 - Buy Entries
There are a few important things to consider before you open the long order. First of all, determine your buying zone with your trading strategy. The support level should be very strong and it should provide strong bullish price action signals. Those who don’t have price action analysis skills should use the pin bar and the doji pattern.
Spotting any pin bar or doji pattern is a strong indication that the bulls will dominate the trend. Analyze the SL and TP levels based on your desired entry price. After that have a look at the Cycle Period Indicator signal line. The red signal line should be in the rising mode after creating the valley near the bottom segment of the indicator panel.
If not, you should not take the trade. Those who are getting confused with the steps required to analyze the signal line can follow a simple slope trading technique. Open your long order when the slope is positive and ignore the trade signals when the red line is falling in the chart.
Cycle Period Indicator For MT5 - Sell Entries
The elite traders know the importance of robust trading methods. They always encourage novice traders to start trading in a demo environment. By using the paper trading account, you can easily craft a perfect short trading strategy. Usually, investors look to sell at the resistance level but some advanced traders often take their short trade right after the bearish break of a support zone.
But in both cases, the signal line for the Cycle Period Indicator will show a falling curve. When the trades are taken right at the resistance, the position of the signal line will be near the top of the indicator panel. On the contrary, when the trades are taken at the break of an important support zone, you should see the red signal line has already gained the ascending momentum.
Though the Cycle Period Indicator can be used in the lower time frame, traders are requested only to trade in the hourly and daily chart. To trade in the minute chart, you must proper skills and training on the price action trading edge. Once you know the precise way to use the Cycle Period Indicator as a filter, you will be able to solve the problem of overtrading and this will also boost your gains.
Cycle Period Indicator For MT5 - Conclusion
Trading is not a child game. It is one of the most delicate business industry. Failing to adhere to the common rules always results in massive losses. But to avoid such a disaster, you can start relying on the Cycle Period Indicator in the higher time frame. Though this indicator can show the potential reversal point with high accuracy, investors should not consider this indicator a trading method.
You have to be concern about the accuracy of your trading strategy. And take the Cycle Period Indicator as a premium trade filter tool only. You might get the green signal to open the trades from the Cycle Period Indicator and your trading method, still you should stay in the sideline unless the RR ratio is satisfactory. We are not imposing a fixed RR ratio since it greatly depends on your win rate.
But to stay on the safe side, you are allowed to execute the trades when the RR ratio is better than 1:2. Regarding the major economic news, try to avoid such an incident as it makes the market extremely volatile and the traders find it hard to analyze the massive swings in the red signal line for the Cycle Period Indicator.
