Forex Price Action Indicator

Key provisions of a technique

Various events and indicators can be catalysts of the market movement, but the trader sees and analyses only the end result as all of them are already considered in dynamics of the price. Today Price Action indicators Forex use the shift of balance of market demand/offer and also market psychology – the conflicts of interests between small participants of the market and market makers.

Price Action patterns are special schemes of trade bars (the Japanese candles) which characterize key market situations not only for the purpose of definition of the current direction, but also for assessment of the most probable reaction – a turn or continuation of a trend.

Indicators Price Action are developed for all trading platforms, are installed by a standard way, analyse the price chart and designate models by standard names, which have to be included in the analysis mechanism.

Main patterns of PA

There are a lot of PA models are described, it is difficult to reveal everything on graphics especially as sometimes they appear nearby and contradict each other. It is especially dangerous if to consider that Price Action indicators shall specify to the trader the most profitable direction of an entrance to the market.

There are no universal tools for recognition, and popular options show the strongest combinations, such as PIN-Bar, Internal Bar and Model of Engulfing − graphic schemes of these patterns are shown below.

After emergence of model it is enough to open the schedule of an asset, to check a trend and presence of strong price levels then to make the trade decision.

On the periods below H1 the use of any RA patterns is ineffective!

The name and structure of parameters differ, but any Price Action indicator has to include without fail the following settings:

barsback − the number of bars for identification of a PA pattern;
M5-MN1− an opportunity to switch off search of patterns on a part of time frames;
arrows, arrowsize, bullarrow, beararrow — the mode, the size, color of arrows at emergence of a set up;

standard names of PA patterns for identification.

Irrespective of the visual form − graphic, signal or oscillator − indicators Price Action are not redrawn!

Indicator Three-in-One

The system consists of three MTF_IB_SCAN indicators («Internal bar»); MTF_OB_SCAN («Engulfing model»); MTF_PB_SCAN («PIN-bar»).

In case of appearance of a PA set up on currency pair (or any other asset − raw materials, stocks) on the periods from M5 to W1 the indicator will signal about it. Arrows of the appropriate direction for determination of entry point appear on a graphics.

It allows to do not pass the strong signal and at the same time not to look for PA patterns where the models are too feeble or they are absent.