Introduction to the MTF Candles Indicator
Most successful traders would consider multiple timeframes whenever they trade. This gives them a better picture of what the market is doing on the short-term and long-term.
The MTF Candles Indicator is a useful tool that can help traders observe price action on multiple timeframes.
What is the MTF Candles Indicator?
The abbreviation “MTF” stands for “Multi Timeframe”. As the name suggests, the MTF Candles Indicator displays the candles from various timeframes.
The MTF Candles Indicator is a custom technical indicator which displays the price action on a chosen timeframe different from the current timeframe on the price chart.
Although this indicator is named “MTF Candles”, this indicator does not display a candle chart formation to represent the chosen timeframe. Instead, it plots a bar chart type of display to represent the price action from the chosen timeframe.
This indicator plots a horizontal line to indicate the open and close price levels and a vertical line to represent the range of the period on the chosen timeframe. The horizontal line on the left of the vertical bar represents the open price, while the horizontal line on the right of the vertical bar represents the close price of the bar. The color of the vertical bar indicates the direction of the candle. Light blue vertical bars indicate a bullish bar, while red bars indicate a bearish bar.
How the MTF Candles Indicator Works?
The MTF Candles Indicator has an algorithm which uses the price feed from the broker. It then plots the last four bars representing the price action of the chosen timeframe.
The color of the bars would depend on whether the close price is higher or lower compared to the open price. It plots a light blue bar if the close price is higher than the open price. It plots a red bar if the close price is lower compared to the open price.
How to use the MTF Candles Indicator for MT4
The MTF Candles Indicator has a few options which can be modified within the indicator settings.
The “Candle TF” variable is used to modify the timeframe displayed as a bar chart. This variable is based on minutes. As such, users must convert the timeframe into minutes. For example, to plot the H1 timeframe price bars, users should encode 60. To plot the H4 timeframe price bars, users should encode 240.
The “Up Candle Color” option allows users to choose the color of the bar the indicator would plot if the bar is bullish.
On the other hand, the “Down Candle Color” option allows users to choose the color of the bar if the bar is bearish.
MTF Candles on a Higher or Lower Timeframe
Using the MTF Candles on a higher timeframe allows users to view how price action formed within the latest candle on the higher timeframe. For example, using the H4 MTF Candles on a Daily chart would allow users to see the H4 price action.
On the other hand, using the MTF Candles on a lower timeframe allows users to see what the price action is on the lower timeframe. For example, using the H4 MTF Candles on the 1 hour timeframe would allow users to see the bigger picture price action based on the 4-hour timeframe.
Conclusion
Although this indicator does not show trade signals or trend direction, it allows users to view the price action on either the higher or lower timeframe. This is a valuable information which traders can use to improve their trading analysis.
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