Sometimes, there is strength in simplicity.
This is especially true if you are new to analysing and trading the Forex markets.
There are some advanced tools available, but their complexity can often be a barrier to entry.
If you are new to FX trading, you are probably looking for easy-to-use tools.
A useful tool that matches these requirements is the Forex High-Low indicator.
Put simply, this indicator:
Why is this useful?
Because it has to do with the way we process information.
For most people, information is more easily digestible when presented visually.
In fact, this is the reason we use charts in the first place.
Without the High-Low indicator, we would need to compare the day's high and low to recent trading ranges, by looking at raw numbers:
...which would be tedious at best.
High-Low indicator plots the day's high and low as horizontal lines, so you can immediately see how the current day fits in the context of the market's recent performance.
If you have never traded with this indicator, you are probably still using the original version of the MetaTrader 4 platform.
The High-Low indicator comes packaged with the MetaTrader 4 Supreme Edition (MT4SE).
What's so supreme about it?
Well among other things, the High-Low indicator is just one of many extra indicators and tools offered by the MT4SE plugin.
These tools can give you a smooth trading experience, that few other platforms may match.
First, let's talk about how the High-Low MT4 indicator can add value to your trading.
One of the most widely used methods of assessing price movements, is comparing current highs and lows to previous ones.
This method is a bit rudimentary, but its main benefit lies in how widely it is used by other traders.
Think about it - what happens when so many people are using the same analysis method?
In short - it becomes essential for gaining an insight into the overall market
For example, if the current high is lower than recent highs, this may cause other traders to view the current trading price as cheap.
In turn, this can create buying pressure and lead to a price rise.
Similarly, if the low is higher than recent lows, it may attract sellers to the market.
After that, it may push prices down.
This is basically how support and resistance levels form.
Of course, the market is less predictable than that and may therefore not always react in this way.
Nonetheless, using the High-Low indicator is a good starting point for predicting price movements.
The High-Low indicator is also very simple to use.
This simplicity means that even beginners can learn how to use it in no time.
So, if you're looking to get that additional value out of MetaTrader 4, but don't know where to begin:
...look no further than MT4SE.
We'll talk about a bit more about some of the MT4SE features later on.
For now, let's run through how to use the High-Low indicator.
Once you install MT4SE, you can see all the additional indicators listed in the Navigator on the left side.
From there, launching the High-Low indicator is only a double-click away.
When you launch it, a window pops up showing different variables used by the indicator.
The tool may seem simplistic at first, but it also offers a high degree of flexibility:
...because you can alter any of the listed indicator variables.
These variables include:
If you're happy with the default values, click OK.
This instantly applies the indicator to your chart.
The image above shows a daily EUR/USD chart, with the high and low of the current day.
Do you see how easy it is to compare the current day's range, to the recent market numbers?
When it comes to tweaking the High-Low indicator to your needs - the sky's the limit.
Some changes in input values are fairly trivial and self-explanatory e.g. changing the colour of the lines.
But some changes are less obvious e.g. altering a variable.
It is a very simple process - you just need to double-click on the relevant box when you first add the indicator.
Alternatively, you can change the indicator you have already added by:
For example in the image above, I:
The default value matches the chart's timeframe.
By changing the value to W1, I switched the timeframe to weekly.
Another useful feature is the ability to set alerts for the price that is crossing the high or low line.
Where's the benefit in that?
The alert lets you know when a key level is breached, even if you are working on a different chart.
Additionally, you can customise the alert to your liking e.g. set it to be a text or sound.
This article has hopefully helped you understand that the High-Low indicator:
As with other indicators, the High-Low indicator will probably work best in conjunction with other tools:
...all of which you can practice cost-free on a demo trading account.