There are a plethora of indicators available in the forex trading world, all claiming to offer traders a competitive advantage. The Inside Bars Indicator for MetaTrader 4 is one such tool. This strong indicator is a favorite among many traders because it can offer insightful information about market trends and possible reversals.
Understanding the Inside Bars Indicator
The Inside Bars Indicator is a type of chart pattern where a bar or bars entirely contained within the range of the previous bar, also referred to as the “mother bar,” are displayed. Generally speaking, the inside bar has a lower high and a higher low than the mother bar. If a bar’s highs are equal to or lower than the mother bar’s high and its lows are equal to or higher than the mother bar’s low, some traders might also classify that bar as an inside bar.
Using the Inside Bars Indicator
Just add the Inside Bars Indicator to any MetaTrader 4 chart to begin using it. The indicator will recognize and highlight inside bars for you automatically. Generally, a bullish inside bar is colored blue, and a bearish inside bar is colored red.
Trading Strategies with the Inside Bars Indicator
Trading in bullish and bearish market conditions is possible with the help of the Inside Bars Indicator. Bullish inside bars can be used by traders as possible buy signals in a bull market. On the other hand, bearish inside bars may indicate a sell in a bear market. It’s crucial to remember that even though the Inside Bars Indicator can offer insightful information, it shouldn’t be used alone. Before making a trading decision, traders should always take into account additional factors like price action and the overall state of the market.
Advantages of the Inside Bars Indicator
The Inside Bars Indicator is a flexible tool that works well on daily, weekly, and monthly price charts in addition to all intraday time frames. It offers a quick and efficient way to find possible trading opportunities. Additionally, it can be combined with other indicators and trading tools to form a strong trading strategy.
How to Trade with Inside Bars Indicator MetaTrader 4
Buy Entry
- Look for a bullish inside bar during an uptrend.
- The low of the inside bar should be above the high of the previous bar.
- Enter a buy order at the breakout of the high of the inside bar.
- Set the stop-loss below the low of the inside bar.
- Set the take-profit at a level that is two times the stop-loss or at the next resistance level.
Sell Entry
- Look for a bearish inside bar during a downtrend.
- The high of the inside bar should be below the low of the previous bar.
- Enter a sell order at the breakout of the low of the inside bar.
- Set the stop-loss above the high of the inside bar.
- Set the take-profit at a level that is two times the stop-loss or at the next support level.
Inside Bars Indicator Settings
Conclusion
In conclusion, the Inside Bars Indicator for MetaTrader 4 is a powerful tool that can help traders identify potential trading opportunities. However, like any trading tool, it should be used as part of a comprehensive trading strategy that includes risk management.
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