Introduction to the Weekly Open Horizontal Target Lines Indicator
At times, significant momentum movements at the start of the week would dictate the direction of the market for several days.
The Weekly Open Horizontal Target Lines Indicator is a tool which traders can use to trade this type of trading opportunities.
What is the Weekly Open Horizontal Target Lines Indicator?
The Weekly Open Horizontal Target Lines Indicator is a technical indicator which marks the opening price for the week and the potential price levels that the market may reach within the week.
This indicator plots three lines. It plots the middle line, which indicates the opening price, a green line above the middle line, which represents the target price on a buy trade, and a red line below the middle line, which represents the target price on a sell trade.
How the Weekly Open Horizontal Target Lines Indicator Works?
This Weekly Open Horizontal Target Lines Indicator has an algorithm which automatically marks the opening price for the week as the middle line and extends it for the whole week. It then plots the two target lines above and below the middle line based on a specified distance in points. The point value used to measure the distance is selected by the trader. However, this is preset at a distance of 50 pips or 500 points.
How to use the Weekly Open Horizontal Target Lines Indicator for MT4
The Weekly Open Horizontal Target Lines Indicator has a few modifiable inputs within the indicator settings.
“Weekly Open”, “TP Long Target”, and “TP Short Target” modifies the color that the indicator would use to plot the horizontal lines.
“TP Target” modifies the distance from the Weekly Open in which the upper and lower target lines are placed. This is the most important variable that the trader could modify.
“Line Style” modifies the type of line used, while “Line Width” modifies the thickness of the line the indicator plots.
Buy Trade Setup
When to Enter?
Open a buy order if price action forms a bullish momentum during the starting hours of the week.
When to Exit?
Set the take profit target at the green line above the entry candle and allow price to reach the target.
Sell Trade Setup
When to Enter?
Open a sell order if price action forms a bearish momentum during the starting hours of the week.
When to Exit?
Set the take profit target at the red line below the entry candle and allow price to reach the target.
Conclusion
The Weekly Open Horizontal Target Line Indicator is not completely accurate. However, traders using this indicator do not have to be worried since the targets can be placed far enough to have extremely high risk reward ratios. Price may or may not reach the targets, but the trades that reach the target should generally have larger profits compared to the losses. Still, traders should avoid trading false signals too often as such losses may accumulate and nullify the profits of the winning trades.
Traders should also modify and adjust the target lines depending on the currency pair and market condition as this would often vary.
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