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Being a beginner trader in Forex is very hard. Even though there are numerous indicators available in the market for traders to identify the best trading conditions, most of them tend to be too complex to understand, especially for beginners.
But, there is one indicator that can be very easy to use even for those who are just getting started. It is called the High Low indicator and it can be very helpful for traders to identify very simple measurements in the market.
The MT4 high-low indicator in Forex works by indicating the high and low for the price of the security in a specific time period. The indicator is represented on the charts with two horizontal lines. The best thing about this indicator is that it can be used with numerous strategies, including scalping and day trading.
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In today's guide to FX high-low indicator, we are going to discuss all the different ways to implement this strategy for novice traders. So, without further ado, let's get directly into it and see how this indicator can help you succeed in the Forex trading market.
If you are new to technical analysis, you need to start with something simple and easy to use. A great option for such traders is the high-low indicator. When used, this indicator plots two horizontal lines on the chart, which represent the high and the low of a certain period. One might ask, why is the daily High and Low indicator useful?
The main reason behind it is quite simple. For many people, perceiving information when it is displayed visually is a lot easier. Without this indicator, you would have to compare the prices by looking at raw numbers, which is not exactly the best and most efficient way to do analyses.
The main idea behind using this indicator is to identify the highs and lows with just one look at the indicator. The high-low indicator comes built-in with the MetaTrader 4 trading platform, so there is usually no need to download it separately.
The MT4 daily high-low indicator can be used by Forex traders to identify short-term support levels in the market, as well as the short-term resistance level. Support in Forex occurs where a downtrend is expected to end, and resistance occurs where the uptrend is expected to pause. These can be viewed as the maximum points to which the price will potentially increase or decrease.
You can further confirm the information that you have received from using this indicator by employing fundamental analysis and closely following the market news.
The best thing about this indicator is that it can be used with many different trading strategies. While most people use it for short-term strategies, it is also quite helpful for long or mid-term trading strategies.
We have already discussed that this indicator can be used by traders to determine the support and resistance levels when trading Forex. But, how do you identify the high and low of the day in Forex by using this indicator? That is actually quite easy, as this indicator provides you with information that can be easily understood with just one look at the chart.
As already noted, this indicator does not require a separate download as it comes pre-installed with MetaTrader 4 and is built-in to most trading platforms. Once you open the trading platform, you can simply go to the “Navigator” section, look for “Indicators”, and search for the “daily high-low indicator”.
After doing so, you can simply double-click the indicator, set the settings according to your personal needs, and let the indicator do its job. This makes the indicator very easy to use. You can also set the colors of the indicator according to your preference.
This indicator can be used for numerous reasons in the Forex trading market. Among many others, it can be used to formulate breakout strategies. Many traders can use this indicator to add value to their individual experiences. It is a widely adopted method to use this indicator to assess price movements and compare the current highs and lows to previous ones.
As we have already discussed above, this indicator is very frequently used in the market to identify support and resistance levels, which further increases the importance of the previous high and low.
Finding support and resistance levels in the Forex trading market is very important for creating a trading plan. Having a well-developed plan is pivotal for making it in the Forex trading market. This way, you will know exactly what to do at any given moment while trading.
A huge advantage of the daily, weekly, and monthly high-low indicator in MT4 is that it can also be used for identifying trends in the Forex trading market. For example, if you use it on a chart that has shown a gradual downtrend in the price movement, you can tell that there is a negative trend in the market.
Paired with other indicators, traders can also find possible points on the chart where the trends could change.
As with anything else in the Forex trading market, the MT4 high-low indicator also comes with numerous advantages and disadvantages that traders should know about.
While this indicator can be an amazing tool for beginners to determine the price movements in the market, it can also be insufficient for more experienced traders. We will discuss the major pros and cons of this indicator below.
The MT4 high-low indicator is a tool used by traders to determine the highest highs and lowest lows of a certain period of time. This indicator can be used for long-term as well as short-term trading and can be very helpful for traders in identifying resistance and support levels.
The best thing about this indicator is that it is very simple and can be used by beginners as well as experienced traders. The indicator works by visually representing the highest highs and lowest lows of the market, making it easier for traders to understand where the market stands.
You can find the highest highs and lowest lows of the day using the high-low indicator. This indicator comes built-in with MetaTrader 4 and there is no need to download or install any extra add-ons to make it work. You can identify the highs and lows of the day with this indicator as it draws two horizontal lines on the chart according to the highs and lows of the market.
Of course, weekly high-low indicators can be used by long-term traders. This indicator is a great fit for short-term as well as long-term trading market analysis. If you are trading Forex long-term, you can use weekly, monthly, or even yearly charts to draw the high and low lines and understand the price movements better over a period of time.
In fact, some traders even believe that using weekly charts with this indicator ends up with the best support and resistance levels when compared to short-term trading.