MetaTrader 4 Platform Overview

MT4 New Build 600 (how to upgrade to build 600) - suggestion of Christina Li

How NOT to Trade Bollinger Bands

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Bollinger Bands Indicator Bulge and Squeeze Technical Analysis

The Bollinger Bands are self adjusting which means the bands widen and narrow depending on volatility.
Standard Deviation is the statistical measure of the volatility used to calculate the widening or narrowing of the bands. Standard deviation will be higher when prices are changing significantly and lower when markets are calmer.

• When volatility is high the Bands widen.
• When volatility is low the Bands narrows.

The Bollinger Squeeze

Narrowing of Bands is a sign of consolidation and is known as the Bollinger band squeeze.

When the Bollinger Bands display narrow standard deviation it is usually a time of consolidation, and it is a signal that there will be a price breakout and it shows people are adjusting their positions for a new move. Also, the longer the prices stay within the narrow bands the greater the chance of a breakou



The Bollinger Bulge

The widening of Bands is a sign of a breakout and is known as the Bulge.
Bollinger Bands that are far apart can serve as a signal that a trend reversal is approaching. In the example below, the bands get very wide as a result of high volatility on the down swing. The trend reverses as prices reach an extreme level according to statistics and the theory of normal distribution. The "bulge" predicts the change to downtrend.

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Supply and Demand Tips by Mark Chapman

Read this thread Supply and Demand zones for more explanation and for indicators to download

Average True Range (ATR) for Intraday Trading

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Average True Range (ATR) Technical Indicator
Developed by J. Welles Wilder

The Average True Range (ATR) indicator is a measure of volatility. The ATR indicator measures the range of price movement for a particular price period. The ATR is a directionless indicator and it does not indicate the direction of the Forex trend.


High ATR values

High ATR values indicated market bottoms after a sell off.

Low ATR values

Low ATR values indicated extended periods of sideways price movement- Price Range, such as those found at market tops and consolidation periods. Low ATR values are typical for the periods of sideways movement of long duration which happen at the top of the market and during consolidation.
Calculation

The ATR is calculated using the following:

• Difference between the current high and the current low
• Difference between the previous closing price and the current high
• Difference between the previous closing price and the current low

The final Average is calculated by adding these values and calculating the average.
The indicator of Average True Range is a moving average of values of the true range

Technical Analysis of True Average Range (ATR)

True Average Range can be interpreted using the same principles as other volatility indicators.
Possible trend change signal - The higher the value of the ATR indicator, the higher the probability of a trend change;
Measure of trend momentum - The lower the indicator’s value, the weaker the trend movement.

An Easy and Advanced Way to Set Stops

Talking Points:

• Stops are a necessity because no trading strategy wins 100% of the time
• Traders can use ATR to calculate stop distances based on recent price activity
• Price Action can be used to set stops in trending, or ranging market environments

As traders, we know we need them, but it’s much like the advice of ‘get your annual checkup with a Doctor,’ where most of us simply don’t want to do it.

But in the field of trading, risk management isn’t just a preference; it’s a necessity.
And the reason for this is simple: Because you cannot tell the future. And this means that no matter how hard you try, or how great a trader you become, you will simply never be able to avoid losing entirely. And as a natural extension of that fact, since you will lose on some trades, having sloppy risk management means that one or two losers can wipe away the gains of many small winners.

I know this may sound too simplistic; but this is exactly what was found to be The Number One Mistake that Forex Traders Make: They often win more frequently than they lose - but they lose so much when they are wrong that it wipes away all of the gains from their winners and then some.

Average losses (in red) far outpace average wins (in blue) :

The first step to avoiding The Number One Mistake Forex Traders Make is to set a stop. This allows you to cap the risk on any one trade, so that if it doesn’t go in your direction, you can stem the bleeding before it becomes too unbearable.

Below, we’re going to look at two popular, yet different ways of setting stops. One easy way that is often employed by professional traders for the sake of simplicity; and another more advanced method that may suit certain trading styles more adequately.

The Easy Way

First off, just because this is an easier way of setting a stop does not make it any less valid. This is classified as ‘the easy way’ simply because most traders can pick this up right now, and begin using it instantly with a minimum of instruction.

Average True Range is a favorite indicator of many professional traders, and one of the great things about it is that it’s rather simple in its design. While many indicators wear multiple hats and try to do a few different things at once, ATR is just a measure of price movements over a specific period of time.

If those movements increase in value, ATR goes up. If those movements decrease, ATR goes down.
ATR measures volatility, and this allows traders to set stops based actual market behavior :

There are a few nuances of ATR that traders need to know before applying. We cover these, in depth in the article Managing Risk with ATR. The first is the format with which the indicator displays values. While it looks like an oscillator like RSI, and moves similar to an indicator like ADX; the real value of ATR is in its value. It will measure the ‘Average True Range’ of the last x periods, where x is the input you choose. The default, and most common input for ATR is 14 periods. The value of ATR will read in the price format of the currency pair being analyzed. So, for instance; if a value of .00760 is shown on EURUSD, that means 76 pips (4th place to the right of the decimal is a single pip in the quote).

There is a slightly easier option, and for traders that are using short-term techniques this can be extremely helpful. There is a custom indicator available for Trading Station desktop that automatically calculates, and displays ATR on the chart in a very easy-to-read format. This is completely free, and can be downloaded from the FXCM App Store at this link (link). As you can see below, not only does it display ATR, but it even rounds the ‘.6’ fractional pip as appropriate.

The Advanced Way

Price Action can have a huge impact on a trader’s performance. Inclusion of price action into an approach will often take place regardless of the trader or type of trading being done. Price action can help traders read trends, find support and resistance, and perhaps most importantly - manage risks.

Because, after all - if prices are trending higher, and we’re seeing continuous higher-highs, and higher-lows, wouldn’t it be reasonable to consider closing the trade if the trend reversed?

Remember, this is the number one mistake traders make, and this is the reason stops are so important. If the trend reverses, the trader’s best advice is often to close the trade and look for greener pasture elsewhere... because if the reversal continues against the trader, one loss can wipe away a lot of gains.

If traders are trading a trend, they can look to the previous opposing-side swing for stop placement. So, if an up-trend is being traded, we should be able to see higher-highs, and higher-lows. If we are buying to take part in the up-trend, we can look to place our stop below the prior swing-low (see picture).

During an up-trend, stops can be placed below the previous swing-low :

On the other hand, if we’re selling in a down-trend, we would want to look to place our stop above the prior swing-high.

During down-trend, stops can be placed above the previous swing-high

In How to Analyze and Trade Ranges with Price Action, we look at stop placement in
range-bound markets. If a range is being traded, the ‘peak-high’ and ‘peak-low’ should be identified (see below).

Traders can look to place their stop just outside of the peak of the opposing side of their position. So, if buying, traders would look to place their stop just below the peak-low; and if selling just above the peak-high. This way, if the range turns into a breakout against the trader, the bleeding can be stopped before one loser wipes away the gains from a lot of winners.

If you’d like to become a better Price Action trader, we’ve put together the basics into a Brainshark curriculum. The link below will take you directly to the lesson, and after filling in a few pieces of information into the guestbook the session will begin.

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The new version of the MetaTrader 4 terminal features the updated structure of user data storage. In earlier versions all programs, templates, profiles etc. were stored directly in terminal installation folder. Now all necessary data required for a particular user are stored in a separate directory called data folder. Read the article to find answers to frequently asked questions.

• Upgrade to New MetaTrader 4
• Data Copied During the Upgrade
• What Is the Data Folder
• What Is the Installation Folder
• General Mode of Terminal Start
• Portable Mode
• How to run old EX4

More...

Understanding Moving Average for Trading

How to use Moving Averages effectively for Intraday, Momemtum and position Trading.

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Guppy Moving Average thread is here. This is the thread with indicators and how to trade them.

AllAverages
- AllAverages indicator for MT4 and MT5 is on this thread (first post of the thread). And this is first trading template for this indicator.
- AllAverages T3-LSMA-ILRS Trading System is on this thread.
- version #2 of AllAverages T3-LSMA-ILRS Trading System is on this post with template.
- AllAveragesCrossover_v1.1 indicator is on this thread.
- AllAveragesCrossover_v1.2 fixed version is on this post.
- AllAveragesCrossover_v1.3 improved version is on this post.
- AllAverages_v3.1_Crossover_Filled indicator is on this post.
- AllAveragesConsensus_v1 indicator is on this post. AllAveragesConsensus_v1.1 indicator is updated version with new added parameter CountBars (0-all bars).
- AllAveragesCrossover_Tester_v3.1 indicator is on this post. This indicator can show quickly the performance of your settings even with StopLoss and TakeProfit.
- AllAverages_v3.2 indicator is on this post. This version works with Metatrader 4 build 600 and above.

AllAverages T3-LSMA-ILRS Trading System is on this thread.

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RSI strategy for Intraday trading

Using RSI for Intraday, momemtum and swing trading.

MACD, RSI, Stochastics - stock indicators

Technical Analysis Indicator MACD part one

Most technical analysis indicators are lagging. Let show you how to use MACD properly and its Leading indicator values.

Technical Analysis Indicator MACD part two

Part two of the three part series on MACD