Discussing the article: "Price Action Analysis Toolkit Development (Part 16): Introducing Quarters Theory (II) Intrusion Detector EA"
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Check out the new article: Price Action Analysis Toolkit Development (Part 16): Introducing Quarters Theory (II) Intrusion Detector EA.
In our previous article, we introduced a simple script called "The Quarters Drawer." Building on that foundation, we are now taking the next step by creating a monitor Expert Advisor (EA) to track these quarters and provide oversight regarding potential market reactions at these levels. Join us as we explore the process of developing a zone detection tool in this article.
I won’t dwell too much on this section, as the Quarters Drawer Script was thoroughly discussed in our previous article. However, if you haven't read it yet, I highly recommend following the links provided to gain a full understanding of the foundational concepts. That article primarily focused on automating the drawing of quarter levels, making market analysis more structured and efficient.
As previously mentioned, Quarters Theory was discovered by Ilian Yotov and later introduced to the trading community. One crucial point, perhaps not emphasized enough in the last article, is that this theory is highly applicable to currency pairs, making it an essential tool for forex traders. To get a clearer understanding of how these quarter levels function, take a look at the diagram below, which visually represents the structure of the theory.
Fig 1. Quarters Levels
Our Quarters Drawer Tool delivered remarkable results, successfully plotting large quarters, overshoots, undershoots, and smaller quarters. More importantly, we observed that price consistently interacted with and responded to these levels, reinforcing the legitimacy and effectiveness of Yotov’s theory. This was not just a theoretical exercise, the tool validated the power of quarter levels in real market conditions. Now, let’s analyze the diagram below to revisit some of our key findings and insights.
Author: Christian Benjamin