Introduction to price action indicator
The price action indicator is an mt4 technical indicator that reads the price and indicates a minor trend reversal in price.
Price action is the mother of technical analysis and it is difficult to get profit in long-term trading without using price action strategies.
How does the price action indicator work in mt4?
Price action indicators work by analyzing the size of wicks of candlesticks. Wick represents the buying and selling pressure of a currency or an asset.
For example, if the size of the wick is big below the candlestick then it means there is more buying pressure. Because sellers tried their best to make a bearish trend but buyers are in control and they absorbed the selling pressure.
On the other hand, if the size of the wick is big above the candlestick body then it indicates more selling pressure in the market. The big wick represents that sellers have absorbed the buying pressure.
Price action mt4 indicator will show a text NLB or NLS. This is a signal generated by the PA indicator in metatrader 4.
Trading Signals
The first step is to look for the trend of the market. This price action indicator works best in ranging market conditions when the price will move sideways on the chart
Sell signal
After identifying the ranging market structure, place äll order when indicator will label an NLS above the candlestick high. You should hold the trade until another reversal signal in the opposite direction will not appear.
Buy signal
Place a buy signal when the indicator will label NLB below the low of the candlestick. Remember to check the ranging market conditions. Hold the trade until the indicator generates another opposite signal.
Best timeframe to trade
The price action indicator works best om a higher timeframe. It will not work on lower timeframes. That’s why you should trade using this indicator om higher timeframes. For example 4H and daily timeframe.
Conclusion
Price action trading is difficult. But you can use this indicator with candlestick patterns like pin bar to increase the winning ratio. Pin bar and engulfing candlestick patterns are also reversal candlestick patterns. If you will use these patterns with this indicator then you will get winning trading signals.
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