Welcome to our best forex indicator blog again! Traders across the globe are always in search of the best trading tools that will not only enhance their trading skills but improve their profit-making abilities as well. One of the traders’ most important trading tools, their years of experience in the market notwithstanding, is the Harmonic Indicator MT4.
What is the Harmonic Indicator MT4?
The Harmonic Indicator is a multi-timeframe trading tool specifically optimized for traders on the popular MT4 trading platform. Its multi-timeframe feature means that the trading tool can be used on multiple timeframes. It can be used for as little as one minute to as much as one-month timeframe, represented by M1 and MN respectively. No wonder it is one of the leading trading tools for all categories of traders.
How Does the Indicator Work?
Understanding how this trading tool works is crucial to successful trading. Without proper knowledge of its functionality, you may misuse the tool. And thus lose a significant amount of money when trading.
The Harmonic Indicator MT4 improves your currency pair trading skills by providing you with every piece of information you need to trade and make a profit. It first analyzes each currency pair and using the information gathered from the analysis. Therefore, gives you a clue into the prevailing market pattern. The immediate historical data of the given currency pair is factored in to enable the indicator to provide a reliable trading pattern.
In the image above, letters A, B, C, D, and X represent the triangles’ vertices. The first triangle has vertices A and X, while the second one has vertices C and D. They both share vertex B as the common vertex. In the indicator, two conjoined triangles are displayed by default. At the right corner of the indicator, you will find a summary text. The text provides some valuable pieces of information such as the stop loss level, the right place to place your order, as well as the take profit level.
Any of the target levels D1, D2, and D3 is the take profit level where you can place your order. With these trading tips at your disposal, your odds of trading successfully will increase drastically. To get more information about the market price level for the vertex, just place your cursor on any of the vertices.
If you take a closer look at the triangles, you will identify the gems hidden in them. One of the triangles shows you the prevailing pattern and the future expectation in the market, depending on the specific timeframe you are using for trading. The historical data provides the foundation for the second triangle as it is formed on the data.
When using the Harmonic Indicator, understand that the position of your bars or candlesticks in relation to the triangles is immaterial. The bars or candlesticks can be elsewhere, not necessarily within the triangles. However, note that the most important thing is the relationship between vertices and market prices. The market prices must be at the price levels that the vertices indicate.
How to Use the Harmonic Indicator
This indicator is not complex and very easy to use. To use the indicator, understand how it works. And knows the best way to place and close your trading orders. First, optimize your indicator to your satisfaction by changing its default inputs.
This is advisable for experienced traders. However, if you are a novice in the trading business, you are better off with the default settings.
How to Customize the Harmonic Editor MT4
As earlier stated, you may choose to customize the Harmonic Indicator MT4 if you are an experienced trader. To customize the trading tool, tweak the parameters below:
MaxBars: You can set the maximum number of bars that should be considered when the indicator is identifying a pattern. The default value is 21. If you set a smaller number, the indicator will consider a smaller number of bars. A higher number indicates that more bars should be considered.
MinBars: This is the minimum number of bars that the indicator should put into consideration when it is looking for a pattern. Although the default value is 5, you can either decrease or increase the number of bars by decreasing or increasing the number, respectively.
Corner: the position of the text summary is defined here. The default value is 1. You can display the text at other parts of the chart if you set the value to 2, 3, or 4 for the bottom left corner, bottom right corner, or the top left corner respectively.
IsTRIANGLE: You can set this value to either true or false depending on whether you want the grey color of the chart to be displayed within the triangles or not.
NumberOfPatterns: Here, you can determine the number of patterns the indicator should indicate anytime. The default value is 1, but you can choose any value of your choice. It will only display the number of set patterns.
IsHiding: Through this value, you can decide whether the triangle should be displayed or not. For visibility, set the value to false. If you set the value to true, you won’t see the triangle.
Once you are done with the customization, you then open a long position (buy order) or open a short position (sell order).
Short Position or Sell Order
Open a buy order or a short position when the D vertex is below vertex C. Note, however, that you should do this irrespective of whether the market prices have hit the price level given by vertex C or not.
Long Position or Buy Order
Open a buy order when the D vertex is on top of C, regardless of the position of the market prices relative to the price level given by vertex C.
Final Remarks On Harmonic Indicator MT4
Online Forex trading is currently the goldmine of the trading industry. Millions of traders across the globe are leveraging the opportunity offered by Forex trading to increase their income.
With the aid of the Harmonic Indicator MT4 trading tool, you can put your reservations about Forex trading to the background and trade like a pro. The tool makes trading stress-free and greatly rewarding, if you can devote enough time to study how it works and implement the trading tips it offers.
While trading on our platform, this is not the only trading tool we offer. You can choose from the different trading tools that are designed to cover your trading deficiencies. And turn you into a professional trader in no time.