Price Action Scaner Indicator Settings:
Despite the fact that the Price Action strategy does not use classical technical indicators and is oriented towards the analysis of clean graphics, relatively recently programmers have created several useful utilities with terminal ex4 for the MetaTrader4 terminal. They automatically recognize the main patterns and notify the trader about the appearance of signals for the purchase and sale of assets.
Before using the indicators of Price Action, let’s consider the basic concepts of the methodology. First of all, the Price Action method analyzes the structure of the candles, and necessarily – the shadows (or tails) of the candles. Shadows indicate deviations from the closing or opening price for the current period. If the price meets serious resistance of market participants and eventually unfolds, the shadow turns out to be long, and the body is small. In order to make real money at the exchange auctions, you need to trade in the direction of the movement created by large players.
Forex indicator Price Action Scaner I really like. It contains the 7 best candlestick patterns:
- DBLHC – two, or several bars, whose minima are identical. However, the closing price of the last bar is higher than the maximum price of the bar going before it. The signal they create becomes more powerful, due to the number of bars that form the Price Acton setup. The difference in the minima of adjacent bars is no more than three points.
- DBHLC – two, or several bars, whose maxima are identical. Here, the price of closing the last bar is below the minimum price of the bar going before it. The signal generated by them becomes more powerful, depending on the number of bars that form the Price Acton setup. The difference in the maximums of joint bars can not be more than three points.
- TBH/TBL – are several bars, the maxima of which are identical. The setup of the Price Action pattern will be two-sided. The continuation of the trend will be a breakdown of the maximum of the Price Action signal bar. The signal of the trend reversal will be the breakdown of the minimum of the signal bar. The difference in the maximums of adjacent bars should not be more than three points.
- RAILS – The model consists of only two candles (bars). The following conditions are necessary for the formation of the pattern: 1. Candles should be of different directions. That is, there must be a bearish and bullish candle. 2. The bodies of the candles should be long and not less than 70% of the entire length of the candle.
- OVB – The pattern itself is formed from 2 candles, for OVB: 1. The first candle of the bear is less often bullish. 2. The second candle is bullish, and its shadows should update High and Low, and the body completely absorb the body of the previous candle. Hence the second name of the model – bullish absorption.
- PPR – It is a combination of 3 candles. Is both reversal, and the continuation of the trend. For a bull-based setup: The price moves down and sets a new low. The next bar with its minimum does not exceed the minimum of the previous bar, but closes above its maximum. For the bearish setup: The price moves up and sets a new high. The next bar does not exceed the maximum of the previous candle, but closes below its minimum.
- Pin Bar – This is the strongest (at the same time, the most simple) reversal pattern of Japanese candles. The goal is a small body and a long shadow by the candle.
- Wide Range Bar – To build a chart, the trader sets the bar size in points, after passing through, every new bar is opened and starts to be formed. As long as the price fluctuates within the specified High-Low limits, the current bar continues to form.
My opinion is the best patterns that work in this indicator more precisely: DBLHC/DBHLC, OVB.
Build your trading system using these patterns.
The Price Action Scaner indicator works on metatrder 4 (mt4, ex4, mq4).