Price Action Spike Bar MT4 Indicator – Free MT4 Indicator

In this strategy post, we shall look deeper into 2 price action strategies based on the Price Action Spike Bar MT4 Indicator (which you can download for Free here) which are very simple and quite efficient. First of all, let us understand what the price action is. In Forex, the price action is a whole theory and analysis method that is based on price behavior. So, when you carry out the technical analysis from price action perspective, you don’t need the indicators, but are looking only for chart patterns. It is possible only when using the candlestick or bar chart type.

[sociallocker id=”7587″] Price Action Spike Bar MT4 Indicator [/sociallocker]

It may sound strange that Price Action Spike Bar MT4 Indicator is an indicator utilized for price action which excludes any indicators, but you will get the idea. It actually supports the price action by giving signals about the patterns that are formed.

What are the patterns signaled by Price Action Spike Bar MT4 Indicator?

Pin-Bar – First of all, it is the pin-bar, also called Pinocchio. Considering the candlestick chart type, the pin-bar is a candlestick with a small body (open price and close price are close to each other) and 2 tails, one of them being much longer, which is also called the nose (alluding to the nose of Pinocchio). You should keep in mind that it is a reversal pattern, and when the pin-bar appears on the chart, it indicates the price will go against the long nose.

Chart setup

• Time-frame: H1, H4, and D1
• Currency pairs: any pairs you like, but you can start with EUR/USD for testing the strategy
• Indicator: Price Action Spike Bar indicator with default settings
• Chart type: candlestick or bar chart

Price Action Spike Bar MT4 Indicator Trading Rule #1

When the Price Action Spike Bar shows a smiling face above a pin-bar, you should open a short position (Sell), and when the smiling face appears below a pin-bar, you should consider the long position (Buy).

We don’t consider the stop orders (stop-loss and take-profit) with this strategy as you should handle the positions manually. However, if you want to feel secure, place a stop-loss at 20 pips distance. You can also consider the trailing stop.

If you want to make the indicator signals more precise, you can select a higher value for the nose proportion from the indicator menu.

The Outside Bar – it is a reversal pattern which shows good signals for safe entry into the market. The outside bar pattern is actually made of two bars, where the previous bar or candlestick is completely absorbed by the second one (this is why the pattern is also called “engulfing”). Also, when the first bar is bullish, the outside bar is bearish, and vice-versa. The distance from open and close price of the second bar, which is the outside bar itself, exceeds and actually engulfs the open-close distance of the first bar.

Chart setup

• Time-frame: H1, H4, and D1
• You can choose any currency pair
• Indicator: Price Action Spike Bar indicator with default settings
• Chart type: candlestick or bar chart

Price Action Spike Bar MT4 Indicator Trading Rule #2

The Bullish Outside Vertical Bar (BUOVB) appears after a bearish bar, and it shows a Buy signal. Accordingly, when you will see the indicator arrow below such a candlestick or bar, you should open a long position.

The Bearish Outside Vertical Bar (BEOVB) follows the bullish one and is a signal for Sell. When you will see the indicator arrow above such a candlestick or bar, you should open a short position.

Price Action Spike Bar MT4 Indicator – Outside Bar Pattern

We don’t use the stop orders (stop-loss and take profit) with this strategy. You should close positions manually. Yet, if you want to feel secure, set a SL at 20 pips distance.