Dr Alan H. Andrews is among the famous forex traders who invented Pitchfork Method for traders to make profit and find opportunities in this market. This is a method to observe the overall trading market and find the fundamental technique in making money in forex trading. So, here is the basic information on how to use this method.

First of all, you can trade by applying two techniques called trading outside the lines and trading within the lines. Pitchfork actually applies a middle line, also known as median line, between the highest and lowest pitch line. In his theory, he believes that for long term trading, almost 80% of the time, the market price will move towards the median line and the rest will be the unforeseen fluctuations. A trader can always use the opportunity when price stray due to sudden change in the market to make profit.

So, how do we apply Andrew’s Pitchfork method? First of all, get the trend chart. Identify the first point, either the trough or peak. Then, select another two points; one line which connects the peak and another line which connects the trough. These two lines serve as the resistance and support. From the chart, a trader can actually decide easily whether to trade within the line or outside the line. It is actually easier for you to determine the right time to buy and sell currency.

You need to study the trend well before deciding on which technique to apply. It is quite complicated, so for beginners, it is recommended to break the technique into steps so that you can understand it better. First, you need to identify the median line. Then, test the prongs and place an entry.

This is usually being applied for U.S dollars pairs where the currency price moves in trend. It would be more effective if you can combine it with other techniques such as textbook analysis or money management method.

Actually the majority of the forex traders make use of the Metatrader indicator for trend trading. In this type of business, what matters here is who well you trade. You should be smart enough so that you take advantage of the profits that are waiting for you to grab hold of. Intelligent decisions are a must when it comes to using the forex indicator. Yes, you may use any kind of forex indicator so that your decision making will be successful. However, this will not always be the case. With numerous people competing in this market, you can never be sure that you will win against them. If you do, it may not always happen that way.

Meanwhile, trend trading forex indicator will be your guiding instrument so that you can make decisions based on the data that you have fed into it. What makes this forex indicator unique is that it is very reliable and provides fairly accurate data as it makes use of mathematical algorithms that are based on the previous important events. Before, the traders will have to depend on what the experts say. Even though they were quite valuable, it is inevitable for humans to commit errors. This is why a Metatrader indicator for trend trading has been presented to the public.

A Metatrader indicator for trend trading is focused on giving out predictions that are reliable and almost precise. One can say that this Metatrader indicator is the solution to avoid the undependable assumption so that you can make the appropriate decisions. Since trading in the forex market is very risky, you will need to protect your gains well. This functions on the financial leverage principle. You can only earn big profits if you are blessed.

Trend indicators will help you realize profits and keep away from the losses. You can base your decisions upon the current market trend. One of the best features of these indicators is that they come with trend analysis, which covers the past events in forex market. You are safe from pure guesswork since what is involved here is the fact that mathematical calculations are used. In addition, it does not only concentrate on one aspect of the market but he entire factors that contribute to the changes that you have to deal with.

Forex trading is not about making only one trading transaction per day. You can perform more than one trade. If this is the case, you will have to make sure that your strategy is right so that you will not invite losses on your part. In the Metatrader indicator for trend trading, the number one priority is the direction of the market. Take note however that there is always a risk involved here. Trend trading then requires you to make intelligent trading decisions.

MetaTrader 4 Indicator Trend

Learn more about indicator ‘Trend’

Best regards,

BJF Trading Group inc.

MACD Definition

As mentioned above, MACD is an easy indicator to use and understand. It mainly gauges the difference between a 26 day and 12 day EMA or exponential moving averages. The former is the slower one obviously while the other is the faster one. To calculate the two values, the closing prices are used to determine the difference for the moving averages.

If you are using the MACD chart, you can check it now and you will observe that the 9 day EMA is also plotted. This EMA will act as the go signal for decisions of traders regarding the buying and selling of currencies. For instance, you will have to sell whatever currency you have at hand when the signal goes down to the 9 day EMA. Otherwise, you are going to purchase your currency pair.

Trading divergence often makes use of the MACD histogram because it helps them calculate momentum. The price movement that it detects will be determined easily so instead of using MACD to watch the direction of the current trend, the traders use it to detect the price movement’s strength.

Trading MACD Divergence

To start this, you will need to find the chart points wherein the current prices make the latest swing high or low. However, you should remember that this tool will not let you view the divergence between the momentum and the price of the currency pair.

Before you start trading divergence, you should bear in find that there is a greater chance that you will fail here. This is because just when there are profitable trends and trades, the traders are forced to exit their position due to the results in the MACD divergence indicator.

MACD Histogram Application

Because there is a great conflict in the values of the entry and exit signals, you can resolve this with the help of the MACD histogram. So for instance, if you will have to trade he negative divergence, you should take a fractional short position at the starting point of the divergence. However, you will do this in a different way unlike the conventional one, which compels you to set the stop at the closest swing high, which is reliant upon the price of the currency. Thus, you will put a stop on the trade when the previous swing high is exceeded by the MACD histogram. This is an indication that the momentum is currently in acceleration and the trader is actually committing a trading mistake.

The main reason behind why traders use MACD divergence as their forex technical indicator because it will lead to greater profits once the position is large. With trading as a challenging task, you will have to take advantage of this strategy but only if you understand the whole concept well.  Whether you are a day or position trader, it does not matter. As long as you have a methodical and logical approach, you can take advantage of the whole MACD divergence method in the forex market.

•    Average Directional Movement Index or ADX
•    Average True Range
•    Bollinger Bands
•    Commodity Channel Index
•    Market Facilitation Index
•    Moving Average Convergence/Divergence
•    Relative Strength Index
•    Stochastic Oscillator

A forex Metatrader indicator can be grouped into four. They are the divergence, multi-timeframe, statistical and the general purpose indicators. Here is an example of a divergence indicator in the form of a momentum indicator.

This shows the fractal divergence and thus states that when the divergence occurs between the Momentum indicator and the currency price. This signals that the current trend is going to end. Another example is the Stochastic indicator. You can get the signal here whether you should buy or sell a currency.

Now, onto the multi-timeframe forex Metatrader indicator that includes the trend indicator. This makes use of the four screen concept in which there are four rows that represent the data from the main four timeframes namely M5, M15, H1 and M30. There are also 7 columns here that indicate the seven last bars of the four timeframes.

On the other hand, the general purpose indicators include the AMA Kaufman one and two derivatives as well as the PowerRVI. The latter is a popular indicator that combines the effectiveness of Bollinger Bands and RVI or the Relative Vigor Index. This uses the tick volumes and shows that there is a potential change in the current trend in the market.

The last one is the Statistical indicator which includes the StateX, which efficiently displays the real time statistics through a particular financial instrument. There are two columns here. The first one deals with the balance dependent on the closed trades while the other column represents the equity considering the account with the open trades. Take a look at this statistical indicator which shows the result of the statistics in monetary terms.

The other mode of the statistical indicator is the one that displays the statistics in terms of points. This is an example:

You will be glad to know that there are over 500 free Metatrader indicators that can be downloaded in the Internet today. Since there is a great need for indicators by the traders, there are sites that are willing to help the trader in order for them to make use of their favorite indicator. However, you should bear in mind that these indicators are deemed useless especially if you do not understand what they are all about. Therefore, before you utilize them, ensure that you are familiar with them and you know what they can do to help you as a trader.

If you have no idea what a Metatrader indicator is, you should know that this is just the same as any indicator out there. This is the outcome of a mathematical calculation and is based on the prices or the volume of the commodities, which in the case of forex, the currencies. The resulting figures from the indicator will serve as the forecast of the changes in the price of the currencies from around the world. With statistical indicators, they have been developed for the reason that the traders will have the chance to view the results of actual statistics in real time mode. There are some financial instruments that are used here and they support the ability of this type of indicator to display the balance for the trader that is based upon the current open trades as well as the closed trades at the end of the day.

With several rows on the display here, you will really find it difficult to comprehend just what the statistical indicators are trying to impart to you. However, since the Metatrader is developed to make it easier for the trader, they have included a summary for the displayed rows on the indicator. Now, even beginners will be able to read the data effortlessly. You can also choose between two selections namely the monetary and the statistical points. The former displays the results in terms of dollars while the latter is about showing the result in percentage. You can switch from one to another, whichever you think is easier for you.

There is a statistical system built within the indicators so that it can display the information you will need. It collects and gathers relevant data for the traders that they can examine and eventually make a decision out of it. The information that the system gathered may depend upon the period you have chosen for it to analyze. The longer the time you have entered, the higher amount of data will be retrieved.

Meanwhile, it is important to take note that the Expert Advisors are not statistical. Still, they will play a vital role in nagging the files that your system recognized so that you can use it for later. Statistical indicators not only allow you to scrutinize the forex market and its movements but it also helps in the development of pertinent rules and later on, you will be able to build it as your own evaluator.

Even though forex may be a little complicated for newbies, it does not mean that you have to use a complex system just so you can prove your worth in the marketplace. The secret here is that the easier your system is, the better your relationship with the system will be. Since Metatrader indicators are a great addition to the features of the platform, you will definitely find helpful on your quest on gaining large profits through the foreign exchange market. Statistical indicators will give you better technique in finding out what is the next best move that you should perform.

There are four types of Metatrader Indicator namely Divergence, Multi Time Frame, general Purpose and the Statistical Indicators. The latter was developed so that the traders will be able to display real time statistics using some particular financial instruments. In this statistical indicator, you will know the balance reliant upon the closed trades as well as the equity taking into consideration the open trades currently. All the rows that are shown in the indicator have a corresponding derivative. For beginners who find this quite hard, there is a summary about the rows so that you will be able to read the charts easier. The summary shows the totals and because Metatrader is designed to be user friendly, you can choose between two modes of the indicators. The first one counts the statistics using monetary terms while the second uses statistical points.

The statistical system relies on the information that has been entered and collected previously from the market. The amount of information is relative to the time period in which the market is examined. The input parameters that are optimized over that period of time are not considered as statistical information. Hence, an expert advisor or a system is not statistical. The statistics here is gathered into a particular file in a form that is recognized by the system you are using. Using a statistical indicator will help you in analyzing the market as well as developing rules and building real time evaluator.

Just like all the other technical indicators that are in Metatrader 4, a statistical forex Metatrader indicator is a mathematical calculation result based on the volume or the prices. The figures that are collected will be used to forecast the changes in the prices. When it is time to gather statistics, you need to decide what data should be used. With the indicator, this is the best data that you can record for the statistics. Even those standard indicators allow the trader to gather a great number of information. Later, this will be used to compare the data with the real time market situation.

For some, using a forex system will mean that you have to deal with complicated programs and languages. However, contrary to that, Metatrader is all about making your job as a forex trader easier. The indicators will help you in your success in the forex business. You can use indicators that are changing in the particular range. Examples are the Relative Strength Index and Stochastic. The length of the indicator’s arrays of values is recorded for ever bar or tick. This is one of the important parameters that are included in the statistics gathering. Always bear in mind that when you see that the length is longer, the statistics becomes more uninformative and this is why many experts believe that it is always better to use a single value for the statistical indicator. Make sure that it is unique for the present bar or tick.

Because of the continuous progress in technology, it is without a doubt that the Metatrader indicator is always updated so that you will have better and more useful information. There are indicators out there that state that the resistance and support lines can be used to the pivot points. With different lines, each of them represent a certain pivot position or level in the forex market. This is a great chart feature that makes it easier for the trader or the user to comprehend. This is also very helpful when you want to determine the next cost of the currencies you are watching. In addition, you will also find it easy to search for the stop points that are part of the present forex market.

Usually, a Metatrader indicator comes with a pleasant and attractive environment that a trader will appreciate. Most indicate the multi timeframe signals for different currency pairs. This is only displayed in one window so that you will not find it hard to search for the right things that you need and the ones that you have to watch out for. In the currency pair window, you will be able to find the various strengths of the signals. There are some indicators that are very useful when you are using the scalping strategy and long term trading.

There are several sites that allow you to understand more about these indicators. One of them is the http://iticsoftware.com  which gives you a detailed view regarding these indicators. There are some online sites that allow you to make use of a free Metatrader indicator but be sure that you are aware that some of them may just waste your time. Some may even require you to pay for your account so be careful in dealing with these sites. On the other hand, these indicators are really useful since they are able to tell you when you have to buy and when you have to sell those currencies you have. Distinguish the appropriate market trends and you will soon be on top.

Alligator indicator is considered as one of the metatrader indicators. The principle of Alligator technical indicator denotes that the grouping of the Balance lines called as Moving Averages are used in the development of the fractal geometry and nonlinear dynamics.

· The blue line is determined as the Alligator’s Jaw and it is the timeframe for the Balance line that is used to construct the 13-period Smoothened Moving Average Chart for the future of the eight bars;

· The red line is determined as the Alligator’s Teeth and it is the timeframe for analyzing the value of the time frame for one lower level to the 8-period Smoothened Moving Average that is moved by the future of the five bars.

· The green line is determined as the Alligator’s Lips and it is the timeframe for the balance line that helps in measuring from one lower level to the 5-period Smoothened Moving Average that is moved by the future of the three bars.

The Jaw, Teeth and Lips of the Alligator are used to exhibit the interaction of the various time periods. The clear trends show the picture of 15 to 30% of the utilized time that is important for following the detrainment work in the trade market. The markets are thus fluctuated with the prevalence of certain price periods of the metatrader indicators.

The closure of the Jaw, Teeth and the Lips helps in intertwining of the Alligator for sleep. When the metatrader indicator of Alligator sleeps it develops hunger, due to prolonged sleep. The first important thing it does after waking up is to open the mouth for yawning. Then the Alligator starts smelling the aroma of the food that spreads through the nostrils and finally the Alligator starts hunting for the food. After completing the food, the alligator starts to lose interest over the food that is meant as price and this helps in joining the balance line in the fixation of profit.

Gator Oscillator

The Alligator depends on the Gator Oscillator for exploring the degree of convergence and divergence of the balance lines involved in the Smoothened Moving Averages. The top of the bar chart indicates the difference between the exact value of the red and blue lines. The bottom of the bar chart helps in indicating the exact difference between the values of the green and red line and finally the minus sign arises as the bar chart is involved in the drawing of the chart from the top side to the bottom side.

Fractal technical indicator is a sequence of at least five succeeding bars, with the highest HIGH in the middle, and two lower HIGHs on both sides. The reversing sets is a sequence of at least five succeeding bars, with the lowest LOW in the middle and two higher LOWS on both sides. This correlates to the sell fractal. When the indicators are with up and down arrows the fractals are at HIGH and LOW values.

With the use of alligator, the fractal needs to be filtered. In other words, you should not close a buy or sell transaction, if the fractal is lower than the alligator’s teeth, and if the fractal is higher than the alligator’s teeth. After the signal of fractal has been created, the force which is determined by its position beyond the alligator’s mouth remains more recent. In this case a fractal signal emerges or a signal, until it gets attacked.

The price index is used in the approximation of the better enhancement of the Moving Average. The proximity with the short moving average helps in the authorization of the two intervals that are proposed to contribute the findings of the best opportunity. The price index thus determined helps in the opening and closing positions. The approximations of the price index is enhanced in the movement of the long moving average of 13-period and the indexes are formulated in showing the price trends and their changes. The propositions in the price trends are explained as below:

· The technical indicators are better to be purchased when the fluctuating forces fall below the line of zero and when it becomes zero. The indicators are best to be bought when the period of the indicators show an increasing trend.

· The force of the index show a signalized continuation with an increasing tendency and it shows an increased rise in the new peak level.

· The signal of the price indicators are good to be sold when the index level becomes positive during the decreasing trend.

· The force of the index is said to be in a new trough when the index shows the signal of the Bears Power. The Bears Power continues in the decreasing trend and enhances the index to fall in the new trough.

· When the price level do not show any change or correlate with the corresponding price change in the volume level, it is best to indicate the force level. This enhances the technical indicator to stay on a certain level and makes the trend to change to immediate response level.

Estimation

The force for every market situation and market movement are characterized by certain level of changes such as direction, scale and volume. When the closing price of the current market bar is said to be higher than the preceding bar, then the force of the market becomes positive. When the current closing price of the market bar is expected to be lower than the preceding one, then the market force is said to be in a negative situation. The greater the difference in the market value, the great is said to be force of the price level. The larger the transaction volume, the greater is said to be the expected force. Finally the derivation is arrived as follows:

Force Index (i) = Volume (i) * ((MA (ApPrice, N, i) MA (ApPrice, N, i-1)

The abbreviations are derived as follows:

Force Index – The force index is defined as the status of the current bar

Volume (i) – The present volume of the current bar is determined.

MA (ApPrice, N, i) – Moving average of the current bar for the N period and the Simple, Exponential, Smoothed and Weighted form.

ApPrice – Applied price

N – The number of period applied in the specification of price

MA (ApPrice, N, i-1) – Moving average of the expected previous bar.

The Envelope technical indicators are defined to have a upper and lower margins in the existing price range. The price ranges enforces the metatrader indicators to have a perfect balance in the trading market. The signals for the price range make the individuals to sell them when the price range is diagnosed to reach the upper level of the margin of the band. The signal appears on the top level of the band. When the signal shows a sign of buying, it is expected that the prices reaches the lower margin of appearance.

The main logic and criteria in the determination of envelope as a technical indicator is to, overcome the buyers and sellers to enhance the price fluctuations to the point of extremity. The point of extremity is determined as the upper and the lower level band. The band levels are the points in the price levels that are used in the stabilization of the movement to the realistic levels. These point levels are said to be similar to the interpretation of the Bollinger Bands in the technical indicator.

Derivation

Upper Level Band = SMA (Close, N) * (1+K/1000)

Lower Level Band = SMA (Close, N) * (1-K/1000)

The terms are abbreviated as follows:

SMA- Simple Moving Average

N – The number of period and also it is used to derive the average period

K/1000 – The measure used in deriving the basic points and it is determined as a value used in the shifting of the average values.

Elder-Rays are defined as one of the important Metatrader indicators. The technical indicator of the elder-rays is combined with the existent properties of the price trend to observe and follow the prevailing oscillators and indicators. The elder-rays are exposed in the usage of the Exponential Moving Average indicator and they are represented as the EMA for the best period of 13 and it is enforced as the tracing indicators. The oscillators are exposed in the reflection of the powers of the bulls and bears and they are closely attached with the metatrader indicators. Plotting and pointing the elder-rays can be performed in the three chart exposure. The one side of the price chart helps in plotting the exponential moving average and the other side of the price chart points out the bulls power oscillator and bears power oscillator. These two points are generally called as the Bulls Power and the Bears Power.

Elder-rays are individually used in the combination of other methods. These rays and technical indicators are individually taken into account for the determination of the slope in the Exponential Moving average and they are ranged in the determination of the trend movement. For this the position should remain open in all the directions. The application of the bulls and bears power are made enforced in the definition of the moment of the opening and closing positions. These indicators can be purchased by following the below conditions:

· When the Exponential Moving Average movement is expected to have an increasing and raising trend.

· When the Bears Power oscillator is said to have negative effect and it is having an increasing trend at the same time.

· The Bulls power oscillator having a higher last peak than the prior one.

· The increasing movement in the Bears Power oscillators after the expected Bulls divergence.

The Bear Power oscillator is expected to have a better turnaround on the existence of the positive values. The points and technical indicators can be sold on the following circumstances:

· The Exponential Moving Average movement is expected to have a decreasing trend.

· When the Bulls Power oscillator has a decreasing trend with a positive point.

· When the Bulls Power oscillator is said to be lower than the previous one through the last trough.

· The Bear’s divergence is said to be decreased with the existence of the Bulls Power oscillator.

It is not advisable to open the short position of the Bulls Power oscillator when it is negative.

It is best to trade when the divergence of the Bulls and Bears Power is expected to be best.

However when the metatrader indicator is expected to fall below the expected value of 30, the bullish price of the reversal will be expected to take advantage. As the indicator level is said to rise above 70, the bearish price of the reversal is expected.

When the longer period duration is used for the calculation of the metatrader indicator of Demarker, it helps the market in the acquisition of catching the long trade tendency. The technical indicators are really based on the shorter period effects and force the market to enter the least risk plan. The plan is enforced in reaching the perfect time of transaction for offering a major fall to attack the expected trend.

Computation:

The value and output of the technical indicator Demarker for the ‘I’ interval is computed as below:

· Calculation of DeMax (i)

When high (i) > high (i-1), then the value of DeMax (i) = high (i) – high (i-1), or else DeMax (i) = 0.

· Calculation of DeMin (i)

When low (i) < low (i-1), then the value of DeMin (i) = low (i-1) – low (i), or else DeMin (i) = 0.

· Calculation for Demarker is finally arrived as follows:

DMark (i) = SMA (DeMax, N)/ (SMA (DeMax, N) + SMA (DeMin, N))

The abbreviations are derived as follows:

SMA = Simple Moving Average

N = Represents the number of periods for calculation purpose.

There are a couple of basic techniques for usage of commodity channel indexes:

• Divergence indicators come into play, when the price goes to a new height of maximum and commodity channel index cannot start growing above the previous maximums. Price correction automatically follows the classical divergence.
• This channel index ranges from 100. Values above + 100 inform the indications of the state of being over bought or about a probability of correcting decay, and the values below 100 inform the state of being over sold or a probability of correcting increase in levels.

Calculation

• For finding the typical price you have to have an addition of high, low and the close prices of each bar and divide the result by 3.
• For calculation for the n-period (N) you should arrive at simple moving average (SMA) of typical prices. It is denoted as SMA (TP, N) = SUM (TP, N)/N
• The received SMA (TP, N) should be reduced from typical prices.
• To calculate the n-period SMA with the help of absolute standard deviation (D) values.
• Multiplication of the received SMA (D, N) divided by 0.015.
• Division of Multiple received after multiplication simple moving average by Standard Deviation.

To conclude, commodity channel index is helpful for correcting the price situations and the stock market levels. These indices help in taking proper decisions on analytical lines for which stocks to be bought and which are not to be touched at a particular point of time by graphic indications. These are important for acting as a guide to investors and as an indication of stock market conditions to the investor community at large.

Bollinger brands are plotted on the price charts, but they can be additionally mentioned on the indicator charts or custom indicators. Like in the case of envelopes the interpretation of Bollinger bands is based on the fact of their prices tending to remain between the maximum and the minimum line of the bands. In periods of considerable price change that is when high volatility occurs their results result in widening of bands, which give a lot of room for price movements. During stand still periods or low volatile ones contraction of band occurs by keeping their limits under control.

The following traits are unique to the Bollinger band:

• Sudden changes in prices after the bands contraction because of decrease in volatility.
• If prices go through the upper band, a continuation of the current trend should be expected.
• If the pikes and hollows are monitored by pikes and hollows inside the band, an inverted trend will occur.
• The price movement that has started from one of the band’s lines will tend to reach the opposite ones. This observation is essential for forecasting price guideposts.

Calculation

Bollinger Bands formation happens by three lines. The middle line (ML) is a moving average, which is denoted in the formula:

ML = SUM [CLOSE, N]/N

The top line (TL) is the same as the middle line with standard deviations (D) higher than the ML which should be denoted as:

TL = ML + (D*StdDev)

The bottom line (BL) is the middle line kept down by the same number of standard deviations. This should be denoted as:

BL = ML – (D*StdDev)

It is advised for usage of 20-period simple moving average as the middle line, and plot top and bottom lines, two standard deviations are indicated, which are away from the main average. Moving averages of less than 10-periods are of little effect.

Thus, Bollinger Bands also have the utility of providing volatility factors for price increase or decrease in the stock markets. These are useful for deciding on the time as to when to buy and when to sell? For enabling proper profitability in the deals. For enjoyment of good returns and windfall gains during the times of volatility, these indicators become very useful and helpful.