The way you read the chart differs from trader to another. Every trader has his own strategy or indicators or analysis method. Some traders use RSI, others use MACD and oscillators, however, these in my opinion are not close in their accuracy to the Price Action.
Professional Traders use the Price Action for their technical analysis of the chart in different time frames, not just one time frame.
- Supply and demand zones / Support and resistance
- Raising and falling channels
- Trend analysis using ATR
- And, 1, 2, 3 in different time frames
Professional Traders spend time analyzing the market and drawing objects on charts, but their focus will remain on a limited number of pairs and the process - in fact - not that easy when it comes to repition aiming for the sniper entries.
It is worth noting that working with just 1 method or indicator is like working in a silo. You must use all the above methods to reduce / avoid / eliminate the drawdown as you trade every day. Setting the direction of your trade or when using Expert Advisor is a great thing to consider.
I published the Support and Resistance indicator for MT4 and MT5 a few months back which achieved nearly 70% of my target, but it’s still great tool. Light weight, easy to optimize and draws the support and resistance boxes on the chart as the price moves.
Then, I found another open source “Shved supply and demand” indicator which was a basic indicator, but I improved it primarily by showing the supply and demand zones on the chart in different time frames with the main focus to keep it simple and easy to understand. Supply and demand indicator is available for MT4 and MT5.
Some members do not want to update ICEA or Legacy as they have their set files and familiar with the current versoin.
The price always raise or fall in a zigzag pattern driven by actions by the buyers and sellers and who is in control etc. etc.
What is important for us is to buy at the lowest price and sell at the heighest price. That can be achieved by drawing channels on the chart.
We will use M5, M15 H1 time frames only in the Channels indicator which will make our life a lot easier and we will see in the following examples:
Settings will be as follows:
You can use up to 4 channels with 4 different time frames on each chart. This is helpful in understanding when to buy and sell with confidence and I will elaborate further below, keep going.
Next, are just colors that you can skip and move to “Bars to Check” which is the most important and in fact the only setting you need to change. In short, use 100 - 200 bars. Number of bars is for the indicator to count the number of bars required as minimum to draw the channel. 100 means 100 bars and it also means that the channel will update more frequently.
“History Channels Count” if set to 1, then you will only see 1 channel for each time frame. If you set it to 2 then you will see the current and previous channel for each time frame. Why is this useful? Because you will see how the trend is changing or about to change, for instance, see the below screenshot:
Example of 1 channel for each time frame.
As I said before, use more than 1 indicator to reduce / eliminate the drawdown. Your primary focus as a professional trader is Flaoting Profit (Equity higher than your Balance) at all times.
Here is an example of 3 indicators combined in 1 chart.
M5 trend is Buy
Bottom of M5 channel
Bottom of H1 raising channel
M5 trend is about to flip to sell
Price reached Top of M5 channel
Price reached Top of H1 raising channel
And opposite with Sell Trades. See the example below:
It is better and safer to only Sell in Falling channels and Buy in Raising channels.
Now, let’s see how the Channels Indicator actually works in the backtest and how it will help us when scalping or trading with big lots. (Video is without voice), just watch the channels indicator in action with respect to the candlesticks.
I hope that you find this guide helpful. For any questions or suggestions, feel free to contact me on the Telegram Group at Telegram: Contact @investmentcastle
You can find the Channels Indicator here:
You can always claim 5 free copies of any of my products by opening an account with The Best Forex Broker, deposit 500 USD minimum and share a screenshot with me.