Introduction to the Highest – Lowest Indicator
The highs and lows of a price range are critical price points which traders look out for. It can help traders observe whether a recent high or recent low is being breached. It can also help traders identify possible breakouts.
The Highest – Lowest Indicator is a technical analysis tool which can aid traders in identifying the highs and lows of price by visually marking these levels with a dashed line.
What is the Highest – Lowest Indicator?
The Highest – Lowest Indicator is a technical indicator which indicates the recent price range of the market based on the highest highs and lowest lows of price. This indicator plots a dark blue dashed line above and below price action marking the high and low of the recent price range.
How the Highest – Lowest Indicator Works?
This Highest – Lowest Indicator identifies the highest highs and lowest lows within n periods. This indicator is preset to scan for the last 20 periods. It then plots the dashed line based on the highest highs and lowest lows of price for the last n periods until it is broken by another higher high or lower low.
How to use the Highest – Lowest Indicator for MT4
This indicator has just one variable that can be used to modify the sensitivity of the indicator.
The “Range_n” variable allows users to modify the number of periods the indicator would use to base its identification of the highest highs and lowest lows from. This effectively modifies the price range that the indicator would mark.
This indicator can be used to identify the direction of the short-term trend or momentum. This can be done by visually observing if the upper and lower lines of the Highest – Lowest Indicator are consistently rising or dropping. Rising range lines indicate a rising swing high and swing which indicates an uptrend, while dropping lines indicate a dropping swing high and swing low which indicate a downtrend.
It can also be used to identify momentum breakouts and reversals. This can be observed based on the confluence of a momentum candle pushing either of the lines in a different direction. This often indicates that a swing high resistance or swing low support line has been broken through.
Buy Trade Setup
When to Enter?
Open a buy order on the confluence of a bullish momentum candle and the upper range line sloping up. Set the stop loss below the entry candle.
When to Exit?
Close the trade as soon as price action shows signs of a possible bearish reversal.
Sell Trade Setup
When to Enter?
Open a sell order on the confluence of a bearish momentum candle and the lower range line sloping down. Set the stop loss above the entry candle.
When to Exit?
Close the trade as soon as price action shows signs of a possible bullish reversal.
Conclusion
This indicator is a useable technical indicator. Knowing where the recent extremes of price action is can definitely aid traders in making a trade decision. However, this indicator would have been better if there was a line that would demarcate the midline between the upper and lower half of the price range. This could help traders visually identify whether the market is trending up or down. Traders can however, visually estimate where the median of the range is and assess the direction of the trend.
Recommended MT4/MT5 Brokers
XM Broker
- Free $50 To Start Trading Instantly! (Withdraw-able Profit)
- Deposit Bonus up to $5,000
- Unlimited Loyalty Program
- Award Winning Forex Broker
- Additional Exclusive Bonuses Throughout The Year
>> Sign Up for XM Broker Account here <<
FBS Broker
- Trade 100 Bonus: Free $100 to kickstart your trading journey!
- 100% Deposit Bonus: Double your deposit up to $10,000 and trade with enhanced capital.
- Leverage up to 1:3000: Maximizing potential profits with one of the highest leverage options available.
- ‘Best Customer Service Broker Asia’ Award: Recognized excellence in customer support and service.
- Seasonal Promotions: Enjoy a variety of exclusive bonuses and promotional offers all year round.
>> Sign Up for FBS Broker Account here <<
(Free MT4 Indicators Download)
Click here below to download: