Trader Tip: BPT MT4 Break Out Indicator Here perhaps is another interesting MT4 Indicator tool (BptNewHighs) that you may find useful. Not only in its use, but as a coding example/exercise that will help spur you on your educational path in our field of trading. The price is right (free) … ;-). The aim of this indicator is to help identify break out situations in order to ensure you are trading on the correct side of the market for a given situation.
You have often heard us talk about horizontal price boxes (sometimes flags), where price concentrates in an area before it breaks out to a new price level. The BptNewHighs MT4 indicator displays an alert on the screen when this may occur. BptNewHighs indicator has two inputs. The LookBack amount, which describes the length of the price box you want to look at in time series bars. The second is the StartLookBack period, which indicates how many bars ago the tool will start looking for the breakout situation, from where the current price is. The recommended parameter settings would be: LookBack = 20 to 40 bars and StartLookBack 1 to 5. The BptNewHighs indicator has been set to defaults of 20 and 2 respectively.
With this tool, you may want to wrap it around a broader Trade Plan. Please see the BPT ToolBox (or the links below) to see some examples of how this can be done. The key point with this indicator is to know for a given “X” horizontal price box, when price is in a break out situation. In which case you may want to go with the breakout, or at least not trade against it But a tool in and of itself will not make you necessarily a star trader:
“A fool with a tool, is still a fool.”
Note that this tool can be used on any time series where it may make reasonable sense, adjusting the input parameters accordingly. You may also want to improve the tool by learning a little programming and editing the MT4 Indicator itself. One improvement may be to place a popup alert in case you are not paying too close attention to the chart screen (I will let you figure out how to code this). Click here to download the MT4 BptTool indicator (both executable and source). Click here, or watch below a video presentation of this Trader Tip and use of this MT4 Indicator.
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