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Technical Indicators

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In the world of trading, staying ahead of the curve is paramount. Technical indicators are powerful tools that help traders analyze price movements, identify patterns, and make informed decisions. This post will introduce you to the world of technical indicators, explore the MQL5 marketplace, and then introduce our Market Structure Shift with FVG Indicator for MetaTrader 4 (MT4) and MetaTrader 5 (MT5).

Technical indicators are mathematical calculations based on the price and/or volume of a security. Traders use these indicators to:

  • Identify Trends: Determine the direction of the market (uptrend, downtrend, or sideways).
  • Gauge Momentum: Assess the strength or weakness of a price movement.
  • Spot Potential Reversals: Recognize potential turning points in the market.
  • Generate Trading Signals: Identify potential buy or sell opportunities.
  • Measure Volatility: Understand the degree of price fluctuation.

Technical indicators are not crystal balls, but they provide valuable insights that, when combined with other forms of analysis (like fundamental analysis and risk management), can significantly improve trading decisions. Common examples include Moving Averages, MACD, RSI, Bollinger Bands, and Fibonacci retracements. Each indicator uses a different formula and provides a unique perspective on market behavior.

The MQL5 marketplace is a central hub for traders using the popular MetaTrader 4 (MT4) and MetaTrader 5 (MT5) platforms. It’s an online store where developers can sell (or offer for free) a vast array of trading tools, including:

  • Indicators: Custom technical indicators, like the one we’re introducing today.
  • Expert Advisors (EAs): Automated trading robots that execute trades based on pre-defined rules.
  • Scripts: Tools that perform specific tasks, such as placing orders or managing positions.
  • Libraries: Collections of reusable code that can be used to build other tools.

The MQL5 marketplace provides a secure and convenient way for traders to access a wide range of tools to enhance their trading experience. It also offers a platform for developers to share their creations and potentially earn income. The MQL5 community is large.

Now, let’s introduce our contribution to the MQL5 marketplace: the Market Structure Shift with FVG Indicator, available for both MT4 and MT5.

Are you tired of missing crucial market turning points? Do you want a clearer picture of price action imbalances? Understanding market structure shifts (MSS) and fair value gaps (FVGs) is essential for successful trading, and our indicator identifies them easily.

Market Structure Shifts (MSS) and Fair Value Gaps (FVGs)
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  • Market Structure Shift (MSS): A shift occurs when price breaks a significant swing high (in a downtrend, suggesting a bullish reversal) or a swing low (in an uptrend, suggesting a bearish reversal). These are key indicators of potential trend changes.

  • Fair Value Gap (FVG): An FVG is a price imbalance created by rapid price movement, leaving a gap between the wicks of consecutive candles. These gaps often act as magnets, with price potentially revisiting them later.

Key Features
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  • Automated MSS Detection: Identifies bullish and bearish shifts based on swing high/low breaks and significant candle body size (relative to the average). Visualized with up/down arrows.
  • FVG Identification: Detects bullish and bearish FVGs based on the last three candles’ price action. FVGs are highlighted with colored rectangles.
  • Real-Time Notifications: Receive instant mobile and terminal notifications for both MSS and FVG formations, allowing for quick reactions.
  • Customizable Parameters:
    • Lookback Period: Adjust swing high/low calculation period.
    • Displacement Factor: Control the minimum candle body size for a valid MSS signal.
    • Minimum FVG Size: Set the minimum size (in points) for a significant FVG. Crucial and asset/broker-dependent.
    • Candle Body Size: Define a minimum candle body size (in points) for a valid MSS. Also asset/broker-dependent.
    • Bottom Arrow Line: Adjusts the vertical placement.
  • Broker and Asset Dependency: Essential to optimize Minimum FVG Size, Candle Body Size, and Bottom Arrow Line for your specific instrument and broker.
  • Clear Visualizations: Arrows for market shifts and rectangles for FVGs provide clear on-chart cues.

How It Works
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The indicator combines:

  1. Swing High/Low Breaks: Calculates swing levels over the Lookback Period. A potential MSS is signaled when price breaks a swing level and the candle body size exceeds the Displacement Factor times the average candle body size.
  2. Three-Candle FVG Analysis: Examines the last three candles to identify FVGs (areas of price inefficiency).

Mobile and terminal alerts can be sent upon detection of either an MSS or FVG.

Important Considerations
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  • Optimization is Crucial: Due to broker and asset dependency, you must optimize the parameters for your instrument and broker. Use the MT4/MT5 Strategy Tester.
  • No Repainting: Signals are generated after the candle closes.
  • Supplementary Tool: This indicator is a powerful aid, not a standalone system. Combine it with other analysis methods and your judgment.

Ready to enhance your trading? Download it for FREE from the MQL5 marketplace:

We’d love your feedback! Leave a review on the MQL5 marketplace and let us know how it’s helping you. Contact us with any questions or suggestions!

Tip: Trading involves substantial risk. Past performance is not indicative of future results. This indicator is for educational purposes only and is not financial advice. Use it at your own discretion and practice proper risk management.

Autor
Apex Team
Algorithmic Trading Solutions