Channel Signal Indicator

Channel Signal Indicator

he Channel Signal Indicator helps forex traders to easily identify trends, and when to enter and exit trades.

Trend trading is the most profitable trading in strategy the forex market. This is because market moves in trends, forming swing highs and lows in all time frames. Thus, most forex traders always follow the trends by identifying swing highs and lows.

There are many forex strategies and indicators that help traders identify and trade trends. These strategies and indicators may be too difficult to understand or even confusing, especially to newbies. The Channel Signal Indicators for MT4, however, help traders to easily identify trends and entry points.

The Foundation

The Channel Signal Indicator helps forex traders to easily identify trends, and when to enter and exit trades. This indicator identifies trends by showing the swing highs and lows. This makes it easier for traders to know when the market is in an uptrend or in a downtrend.

The diagram below shows the Channel Signal Indicator on the AUD/USD H1 chart.

From the chart above, the red colored arrows are indications of a downward trend and thus, signal sell trades. This simply means that a bullish run has ended and a bear market has begun.

Consequently, the aqua colored arrows displayed on the chart mean the beginning of an uptrend and thus, signal buy trades. This is an indication that the market has ended its bearish run and a bullish market has begun.

This indicator perfectly works in all time frames (from 5 minutes to monthly time frames). Scalpers, intraday traders, swing traders and position traders can use this indicator profitably.

In addition to this, the Channel Signal Indicator is suitable for all market conditions. Range traders can use this indicator to identify support and resistance levels. Furthermore, trend traders can also use this indicator to identify dynamic support and resistance zones.

How to use the Channel Signal Indicator
The Channel Signal Indicator can be used solely or in combination with other technical indicators. This indicator is best used together with price action and market structure analysis to give the best result.

The AUD/USD H4 chart below shows how to use this indicator on MT4.

In the H4 chart above, the AUD/USD is in a downtrend, as indicated by the red trend lines. This trend lines formed a dynamic support and resistance levels as the price bounces off them.

On June 16, 2021, the candle torches the upper trend line of the downtrend, forming a doji. Consequently, the indicator shows a red arrow indicating a sell signal. A short position can be placed after the close of the doji. The stop-loss should be placed around 0.77189 (indicated on the chart as a green horizontal line). The sell trade should be closed when the red arrow changes to an aqua arrow.

Also on June 18, 2021, the Japanese candle torches the lower trend line of the downtrend, then a bullish engulfing candle was formed. Finally, the indicator shows an aqua arrow indicating a buy signal. A long position can be placed with the stop-loss around 0.74620. This long trade should be closed when the indicator shows a red arrow.

Conclusion
The Channel Signal Indicator for MT4 helps traders easily identify trading channels and where to enter and exit trade. This indicator works in all timeframes and conditions.

The indicator can be used solely, but it’s best to use it together with price action and market structure analysis.