The Price Corridor indicator is based on a completely new idea! You will not find anything similar. The indicator predicts the probability of a price reversal, and the colored lines help in visualizing the market situation. It can be used both for independent trading and as an auxiliary tool for evaluating the market situation.
How it works
The indicator is based on a customizable moving average line. The indicator analyzes the price deviation from the moving average line over the past 10,000 bars and plots multi-colored lines at a certain distance from the moving average line. Each line represents a certain probability of reversal: green is 50%, solid red is 100%, and the lines between them are defined by the selected set of lines (Standard, Accurate, Rude, Simple) and the probabilities depend on it.
- MA period — period of the moving average line.
- MA type — type of the moving average line.
- MA applied price — price applied in calculation of the moving average line.
- Lines set — the set of lines Options: Standard(70-80-90-95-98), Accurate(75-85-92-96-98), Rude(60-70-80-90-95) and Simple(70-80-90). The numbers in brackets are the reversal probabilities of lines, see the figure for details.
- Count of painted bars — the number of drawn bars. Given the fact that for each bar 10,000 bars are calculated individually, it is recommended to set a lower value on slower machines. That way the indicator will not be plotted too far and it will work faster when switching timeframes.
- Show current value — show/hide the current value.
- Text size — text size of the current value.
- Text color — text color of the current value.
- Notification type — type of notifications. It can send both terminal alerts and Push-notifications to a mobile device.
- Alert level — the level at which a notification will be sent. Please note that notifications are set only at the opening of new bars, therefore, if the price had a tail, notification will not be received.
How to Trade
Indicator can be used on all timeframes (but preferably from М15 to D1). If you do everything right, then you will receive either large profits or tiny losses. The trading method depends on the trend on a higher period. Use can use both standard trend indicator (CCI, ADX, etc.) and custom indicators.
2 sample strategies:
- In a flat — simple enough. Open a trade at the orange or red level (the greater the value, the less the risk) and close when crossing the gray line. You can use trailing stop (on higher timeframes), or partially close the orders as profit is obtained.
- In a trend — everything depends on the strength of the trend. During strong trends, trade after the retracements, provided that they reach the green or yellow level, and close the trade on the opposite green level. Once the price passes the gray level, transfer the trade to breakeven. If the trend is weak, you can wait for higher levels.
If the price breaks the solid red line, this means that the price deviated more than in the last 10,000 bars (happens rarely). In this case, open a trade directly at the level 100 and close when the level 95 is crossed. The indicator can also be used as a trend channel, where the lines serve as boundaries.
Attention! Before you trade on a live account, be sure to practice on a demo account. Evaluate the risk levels and develop a trading strategy for yourself. Also, have a look at the video and screenshots, they contain useful information. The algorithm uses complex calculations, therefore, the terminal may slow down on low-end computers.
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