Retracement Finder MT4 Indicator – Free MT4 Indicator
The Retracement Finder MT4 Indicator is a forex trading strategy which is based on mild price retracements. We can also call this an indicator retracement entry strategy. A retracement is defined as an area where price action which has been in a trend pulls back a little in the opposite direction as a result of profit taking, prior to resumption of a new move in the direction of the initial trend. With the Retracement Finder MT4 indicator, the strategy is a little different. Here, we look out for retracement areas on the indicator histogram bars and not price itself. On the price, we simply look for areas where price action forms minor stalls, which can be used as areas of support and resistance to initiate new entries once the indicator has ended its retracement move.
Yellow (get ready: please note this is my terminology and not a standard forex term)
The strategy entails spotting the area where the Retracement Finder indicator, having earlier crossed into positive or negative territory, starts to retrace to the zero line. At the same area, the price lows or highs are seen to form minor support and resistance areas. It is from these areas, delineated by small trend lines, that the trader can make a retracement entry. The strategy is demonstrated for long and short entries below.LONG TRADE ENTRY RULESThe long trade entry signal occurs when the following is seen on the charts:
Stop Loss and Take Profit SettingsThe Stop Loss is set a few pips below the support line as shown. This is done so that the support line drives a candle bounce that ends up safeguarding the stop loss. The Take Profit point should be set at a point which corresponds to the indicator histogram bar at its highest point. SHORT TRADE ENTRY RULESThe short trade entry signal occurs when the following setup is seen on the charts:
The Retracement Finder MT4 Indicator, having been in negative territory with red bars, starts to retrace upwards to the zero line.
The price action candle highs start to form at the same level, so that a resistance line can be drawn across the candle highs.
Retracement Finder MT4 Indicator - Short Entry RuleObserve the chart closely. You can see that the red indicator bars around the trade area are getting shorter, indicating a retracement towards the zero line. At the same time, price action has stalled at a high, providing a short term resistance on which the trade can be setup. Once the candle high resistance has been hit, a SELL LIMIT set at the brown resistance line will play out nicely. Stop Loss and Take Profit SettingsThe Stop Loss is set a few pips above the resistance line as drawn on the chart snapshot. The Take Profit point should be set at a point where the red bars of the indicator are at their lowest amplitude.
Time Frames
Technically speaking, you can use this indicator for all time frames. However, the shorter the time frame, you will see more fluctuation and possibly more whipsaw which may cause small losses that can eat up your portfolio quickly. We recommend that you use higher time frames like the 4H for better consistency.
Trading with Retracement Video Tutorial
Trading with Retracement
Retracement Finder MT4 Indicator Download
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