Price line strategy. Modern trading methods
for MT-4 is one of the most popular and reliable tools for determining the price level in the Forex market. The levels of this indicator can be used to effectively solve a wide range of tasks related to trading, both for filtering out false signals received from other instruments, and as a basic element. trading strategies... The X-Lines indicator for mt4 can be downloaded for free on the Internet.
The X-Lines indicator was specially developed for the MetaTrader 5 platform, but due to the huge popularity of MetaTrader 4, this tool has been adapted for it as well.
In the process of adaptation for MT-4, the main algorithm for calculating the indicator was retained. Major changes were made to the system that calculates the strength of the level, which practically did not affect the quality of the instrument.
Basic indicator settings
You can download the X-Lines indicator using the link below.
In the process of creating this indicator, the development team used as a basis the assumption that any price groups can be divided into two types: strong levels, which are mainly of interest to large buyers and sellers, as well as general levels with which you can work out resistance and local support. To effectively separate the adjustment levels of the X-Lines indicator, two parameters are used:
- PPH, which is a filter that detects strong levels. When the indicator is installed, this filter has settings of 0.08, but for more efficient trading, it is necessary to select the most suitable value for the used timeframe and currency pair... During the tuning process, it should be remembered that when the settings are lowered, significantly fewer levels will be determined as strong ones.
- PPM, which is a filter that detects levels with an average value. When the indicator is installed, this filter will have a setting of 0.15, but when making settings for a specific pair, the settings will be in the range of 0.02-0.99.
The indicator adjustment process should be carried out so that the PPM is always higher than the PPH. If this condition is not met, the indicator will not work correctly, which will lead to erroneous trades. In the picture below, you can see what the correct settings for the X-Lines indicator look like.
The color of the level is configured in the Medium Level and High Level characteristics, and the number of bars that will be used in the calculation process - in the Period of Analysis characteristic. In standard settings, the value of the Period of Analysis indicator has a value of 0, which makes it possible to analyze the entire available history during the calculation.
Application of X-lines when opening deals
Price levels are a significant element that is used during the technical analysis... It is at the price level that a huge number of stable trading strategies are based that bring significant profits, for this reason X-Lines is widely used when creating orders when the price rebounds from the indicator level, as well as during breakouts.
In the picture above, you can see that the indicator has built its levels with the default characteristics. A strong level is marked in red, it acts as a resistance when the price goes down, and when it moves up, it acts as a support.
Practice shows that X-Lines are super accurate indicator it works much better when the red level is broken than when it rebounds from it. Most often, the price significantly slows down its movement, and in some cases it can create several bounces, but despite this, the level breaks out, and the price moves towards the following targets. In the figure below, you can see an example of such a situation.
The reason for this price behavior is the calculation algorithm used by the indicator. When using any currency pair, the price will behave this way before the breakout occurs.
Using the indicator as one of the tools
Strong levels are optimal for confirming the optimal point of entry into the market, and middle levels help determine the optimal location for Stop Loss and Take Profit.
Practice shows that this indicator is perfect for use as additional confirmation of the readings of such instruments as the moving average, which is quite often lagging. The use of X-Lines allows you to perform an analysis of possible risks in advance.
Advantages of the X-Lines indicator
Among the huge number of advantages of this indicator, it should be noted that it is easy to set up and use. In order to download and configure the X-Lines indicator, you only need a few minutes. When using it, the trader will immediately be able to see the average and strong levels without cluttering the chart and making any complex settings. When carrying out calculations, we use not information about the past levels of the minimum and maximum prices, which quite often create false bounces and breakouts, but our own algorithm, which makes significantly fewer mistakes.
The X-Lines indicator for MT-4 does not have a breakdown of levels by different types, because there is a positive experience of their use as equivalent.
With a huge number of advantages, this indicator has practically no significant disadvantages. Thanks to this feature, it can compete on an equal footing with such a popular tool as Pivot levels. The main disadvantage is that when the entire history is included on small timeframes, there is an excessively large number of levels.
You can download the x lines indicator for free on a non-specialized website, after which it will be possible to check the signals of other trading instruments you use, and thereby significantly reduce the level of risks when opening orders.
From the article you will learn:
Greetings to you, dear readers and visitors of our site. As part of this article, I would like to consider an interesting indicator of price levels called Lines. How, just working a little differently.
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Unfortunately, many traders simply do not understand this, so they like to start. Yes, the level can be good and strong, but this level is unlikely to resist a strong trend. In general, the use of levels is theoretically simple technique, however, all this ephemeral simplicity comes to naught when you try to use the levels in practice, that's when the fun begins. It will immediately become clear to you that significant experience is needed in order to correctly, and most importantly, profitably use these levels. However, trading by levels is incredible effective method trade, and this cannot be denied.
Settings
The indicator can be conditionally divided into two parts of the same functionality. The operation of the first of them is set by the variables X1, Y1, as well as L1 and L2 (see the settings manual). The second part is configured with X2, Y2, L3, L4.
We suggest you use the first block to determine important price levels (support and resistance) for the longest of the two periods, and the second block to find levels for a shorter period.
The periods in this case are measured in the number of candles of the timeframe that is on your price chart. The nominal settings of the first block are as follows:
L1 = Blue
L2 = Red (red)
This means that the blue line on the chart will mark the most important resistance level for the last 30 candles of the current timeframe. The red line shows us the support level for the same period (30 candles). The thickness of these lines on the chart is 3 points.
Second block of settings:
L3 = Turquoise (turquoise)
L4 = Pink
In this case, support and resistance are sought in a shorter period than the previous time. Now they are determined for a period equal to 16 candles of the current timeframe. The support (pink) and resistance (turquoise) lines are 2 pips thick.
The periods can be changed by customizing the indicator according to your own needs. The levels of both periods can be the same or different. The indicator readings help to understand how the levels are changing, which of them are most relevant now (those that are displayed in colors), whether they changed over recent times(if they do not match) or have been unchanged for a long time (if they match).
From the article you will learn:
In our search for indicators that will be useful in the review, we found as many as three copies that fit the description to our sample.
We downloaded them all and saw what they write about them, and tested it ourselves with our skillful eyes.
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Attention! The third indicator is considered only in the video!
X lines super accurate indicator
In general, these instruments depict price levels using averaging over a certain time period.
The idea was already implemented in, however, it used the previous day for the calculation. On the week when this day is non-standard, for example, the picture on an active day turned out to be inadequate. To determine the levels xLines finds the average candle size for the period. XLinesReg levels are based on linear regression, which is better for this purpose than MA.
X lines indicator - download
Files from the archive are installed in the terminal folder, in the MQL4 \ Indicators section. When this is done, open three windows, set each one separately by the indicator and begin to study them.
The first in line will be the most incomprehensible at first glance and causing difficulties in mastering. The sooner we figure it out, the better.
Let's define what X-Lines MT4 is for. It happens that a trader has difficulty finding price levels. Then he usually notices that he is overly subjective, and if so, then x lines come to his aid. Moreover, this tool cannot be subjective. It is objective as much as its algorithm is objective.
Note that not so long ago it was not easy to download this tool for free. The thing is that it was written for the fifth version of the terminal. And, behold, now they have created favorable conditions to use it on MT4. Therefore, you can safely download this super accurate indicator for free and start using it.
Some descriptions of this tool find thinner and thicker lines in the lines, drawing a conclusion about their importance. We analyzed the instrument readings: in our opinion, all lines are the same. Only sometimes one is superimposed on another, then a more important level is born, simply by combining several lines. Although, the probability that the thickening is performed in the algorithm still remains. In any case, you can only say super accurately by analyzing the code. And since this is not possible, we will leave it on the conscience of the author of the instrument.
In any case, an accumulation of lines forms support and resistance. As correctly noted, if the chart is above this zone, then it is support, otherwise it is resistance.
Did you download the x lines indicator for free? Now read the description
The X-Lines MT4 software does not have many settings. So it's hard to get confused.
- Positional_Power - This filter is used to sample levels. It is possible to achieve that only significant levels appear on the chart. And you can have more of them. Moreover, the lower the value from 0.001 to 1, the less levels you will see.
- Level - color scheme,
- Period of analysis. Since the algorithm for calculating the indicator is not the simplest one, in order to speed up the calculation time, a limitation is introduced on the number of counted candles. A value of 0 means that the entire data array will be calculated.
It will be easier for you to figure it out if you just place the instrument on the chart and start working with it without changing the settings. Because, this way it is faster and so you will be able to assess how accurate the authors are in their choice. After all, the tool is quite fresh, which means that the default values are relevant. In general, check it out!
Watch
Couldn't download x lines indicator for MT4 for free? Download from us and see the use of one tool in the video and two in the description
We carried out our testing and here are the results of studying all three indicators. We liked two indicators. With curved lines and multicolored horizontal levels. They are the easiest to read. Of these, we chose an indicator with horizontal levels and described the process of entering and exiting based on indicator signals.
We need:
We will have horizontal channels that move to new levels every day. Using the MACD and EMA, we determine the beginning and end of the trend. From the starting point, we enter only along the trend. The starting point in our example is the crossing of the moving average line by the chart from top to bottom and the appearance of the first MACD bar below zero. The end of the trend is the intersection of the zero line MACD bars, or the crossover.
So we see downtrend... This means that we trade only on the breakdown of the channels down from the level of the label.
And now, like a strange color code, we will mark the correspondence of digital labels and entry points, take profits, stop losses and colored segments.
So the first deal:
- Entrance - orange,
- Take profit - purple,
- Stoploss - light blue
Second deal:
- The entrance is gray,
- Take profit - purple,
- Stoploss - purple
Third deal:
- The entrance is gray,
- Takeprofit - purple
- Stoploss is purple.
The second and third trades are not 100% profit, since the upper tail touches the stop loss line. In this case, you can apply two of the simplest filters. Do not trade on purple levels. more by one level, more so that the ratio is 1.5-2 to 1.
In conclusion, I would like
Static barriers are important price levels that have a direct impact on trading on foreign exchange market... It is difficult to overestimate their importance for entering the market, or for determining the moment of closing a position. Static support and resistance levels often act as pivot points and therefore are present on the charts of the vast majority of successful traders.
When determining static levels, a trader needs to conduct an independent analysis of the selected trading instrument in the long term, in other words, evaluate the historical areas of support and resistance and highlight those that are combined with each other.
If a trader has a large number of active instruments, such a simple task becomes a laborious time-consuming process. Why not optimize such a mechanical task? The X Lines indicator offers a solution for automatic determination of static price levels.
Indicator characteristics
- Platform: MT4, MT5.
- Trading instrument: any.
- Timeframe: any.
- Trading time: relevant regardless of the duration of transactions.
How does the indicator work?
The X Lines indicator analyzes the historical quotes of a trading instrument and independently forms important static price levels. The analysis is performed on the basis of the selected number of bars, so the trader can independently limit the analysis period.
Another parameter, Positional Power, determines the elasticity of the indicator: a high value of a variable will reflect more potential static levels on the chart, while a low value will highlight the most significant barriers. The default value of the parameter is 0.114.
Let's consider the work of the indicator using the example of the USD / CHF currency pair
Daily timeframe, Positional Power 0.114 *, the whole story.
Daily timeframe, Positional Power 0.114, 1000 bars.
Daily timeframe, Positional Power 0.8, the whole story.
Daily timeframe, Positional Power 0.8, 1000 bars.
Hourly timeframe, Positional Power 0.114, the whole story.
Hourly timeframe, Positional Power 0.114, 1000 bars.
Hourly timeframe, Positional Power 0.8, the whole story.
Hourly timeframe, Positional Power 0.8, 1000 bars.
* The results of the indicators at the minimum value (for example, 0.01) differ minimally from the standard parameter 0.114.
How to use it in trading?
The X Lines indicator cannot offer an independent setup for entering the market, but it is an effective tool in the complex analysis of the instrument, which is offered, for example, by the "Elder's Three Screens" system.
Using the described example of the USD / CHF currency pair, the X Lines indicator potentially confirmed a sell from the static resistance of 0.9790 (a combination of upper levels) with the target of 0.9528, determined by the previous daily low of September 18.
Conclusion
The key advantage of the X Lines indicator is the automatic determination of important price levels on the chart. The disadvantages of the tool include the need to recalculate the indicator when the timeframe changes.
MetaTrader 4 has developed many different tools to automatically plot quotes of important levels on the chart. All of them provide convenience, speed and error-free execution of this process. One of them - indicator of price levels Lines, the peculiarities of the application of which this article is devoted.
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But first, let's figure out what the forex price levels are. Quotes of any asset change fluctuatingly over time, repeatedly assuming the same values. At first glance, all these movements are chaotic. However, looking closely, you can see certain patterns in them. One of these patterns is that the quote reaches a certain value, stops, and then starts moving in the opposite direction. Moreover, from certain values, the quotation can unfold repeatedly.
It is these values that are called price levels in Forex. Among their several varieties, we will consider only two, which are called support and resistance. Support is always located below the quote and, having reached it, the falling quote can turn around and start growing. Resistance is always located above the quotation and, having reached it, the growing quotation may begin to fall.
Thus, a bottom or a minimum is formed in the support area on the quote chart, and a top or maximum is formed in the resistance area. Accordingly, a price low is a sign of support, and a price high is a sign of resistance. It follows from this that when a minimum is formed, support is most likely formed, and when a maximum is formed, resistance is formed. And if on the chart the quotes re-form at the support level a minimum, and at the resistance level a maximum, then such levels are considered confirmed and the likelihood that the quote will reverse again, having reached them, significantly increases.
The reasons why support and resistance are formed can be different. We will not analyze them, but only consider how these price levels in Forex are marked by the Lines indicator.
Description and working principle of Lines
The indicator draws 4 bands on the chart (Fig. 1), differing in color (blue, red, blue and pink). The blue and red bands correspond to price levels (respectively, resistance and support), defined in a long time period (i.e., which are long-term, and therefore more important). The blue (resistance) and pink (support) bands correspond to price levels identified in the short time frame (i.e., which are short-term and therefore less important). It should be borne in mind that if the long-term and short-term resistances coincide, then the color of the second one turns green, and if the long-term and short-term support coincides, then the color of the latter turns blue.
For each of the indicated pairs of levels in the settings there are 4 parameters (Fig. 2):
- for important levels - X1, Y1, L1 and L2;
- for unimportant levels - X2, Y2, L3 and L
The L group parameters determine the color of the resistances (L1 and L3) and supports (L2 and L4).
The parameters of the X group determine the length of the time interval in which the price levels are searched for (if X1 is 40 and X2 is 20, then important levels are searched for at the last 40 candles, and unimportant ones at the last 20 candles).
Group Y parameters define the relative bandwidths that mark the levels of this group (if Y1 is 4 and Y2 is 2, then the bandwidth of the unimportant level will be half the bandwidth of the important level).
Levels are recalculated after the close of each candle.
Trading by price levels of the Lines indicator
Displaying only 4 levels determines the specifics of the application of this technical analysis tool. For example, it is recommended that you regularly change settlement period observing the change in the position of the levels. For example, if their position does not change over a wide interval of the calculation period, then we can conclude that the quote moves in the channel.
In fig. 3 on the left shows the levels determined by the Lines indicator with parameters X1 and X2 equal, respectively, 80 and 40, and on the right - 16 and 8. Thus, on time periods with lengths correlated with each other as 1: 5, the position of the levels practically did not change ... This is a sign that the quote is moving in a channel.
In such conditions, the strategy of rebounding from the price lines is applicable, since the movement of the quote within the channel is accompanied by its periodic reversals from its borders.
Using the levels drawn by the Lines indicator, you can trade using the strategy of breaking price lines. For this, important levels are determined that the quote is unlikely to break, as well as less important levels, which are likely to be broken soon. Then pending orders are placed (Fig. 4):
- to buy above the blue bar (blue dotted line) with TakeProfit under the blue bar (blue dotted line) and Stop Loss under the pink bar (pink dotted line);
- Sell below the pink bar (pink dotted line) with TakeProfit above the red bar (red dotted line) and StopLoose above the blue bar (blue dotted line).
After each change in the position of insignificant levels, the old pending orders are not deleted, but new ones are set, corresponding to the new position of the levels defining them. A pending order that has not been triggered is deleted only when important levels change so that it is outside the channel formed by them.
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