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The PChannel Indicator MT4 is based upon the highest high or lowest low of the previous bars of indicator input. A Price Channel, which is the highest or lowest value of an indicator’s input, is plotted by this indicator. It is dynamically changing.
The channel lines are affected by changes in the values of the highest low and lowest low. As a result, channel levels give forex traders BULLISH and BEARISH trend direction. They also provide BUY signals and SELL signals. A channel breakout can cause reversal signals.
This Metatrader indicator must be confirmed with price action. New and experienced forex traders can use this indicator in any forex trading strategy. The indicator is also free to download and is easy to install.
PChannel MT4 Indicator Signals
The EURUSD M30 chart shows the PChannel Indiator for MT4 working in action. The upper price channel has been plotted using BLUE and the lower in RED.
An extended break out at the upper price channel is a sign of a breakout and a BUY signal. Forex traders have the option to place a stop loss at lower channels with take profits levels at a high risk/reward ratio.
You can also sell if a lower price channel breakout occurs. For this type of technical trading strategy, the best stop loss is in the upper channel.
Any reversal signal, however, is a signal to enter a trade in the opposing direction if the channel is not broken. In such cases, the channel acts as support or resistance lines.
Best practice is to confirm reversal trading signals with price action. Higher trading volumes will make reversal points stronger near-established support and resistance zones, trendlines, or support lines.
The PChannel indicator is used for MT4 to aid forex traders in identifying market trends. A flat channel is a market that moves in one direction, while a price movement below the lower channel indicates a BEARISH trend.
Contrary to popular belief, a BULLISH price trend is indicated by a price move above the upper channel.
This Metatrader indicator can be used in both intraday charts and longer time frames, such as the weekly, monthly, and daily charts.
Multi-time frame traders (mtf) will find it extremely useful as it reflects trends in higher time frames. It also allows forex technical traders to locate the best entry point in a shorter timeframe.
Conclusion
The PChannel indicator MT4 is a shorter form of the Price channel. This indicator uses only the highest high or lowest low formula. It provides an easy and efficient price-based trading strategy. Forex traders can also download the indicator free of charge and install it quickly.
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