This is a type of a channel indicator although its channel is discontinuous. It is a very simple to use indicator. And it is a recommendation to the forex beginners. The indicator doesn’t give arrow signal like many other indicators do but rather gives the stop levels under which or below which the market prices are expected to be.
If utilized properly, this indicator can help you make profits. But if misused or used in the wrong way, the same indicator will make you make losses after losses.
This indicator is best for the long term traders.
Understanding how this indicator work.
The indicator is displayed in the main chart. It generates lines that have a dot at the origin/beginning. The lines are either red or blue. The red lines are formed above the market prices while the blue lines are generated below the market prices. This means that the red lines are always above the candlesticks while the blue lines are always below the candlesticks.
The indicator also shows the current level of either of the lines in a show price box that assumes the color of the line at hand. If you do not want to view the current market level of the generated line, you can double click on the indicator and go to the inputs tab and set the show price box as false. You can also set the width of this box at the same place by altering the value of the ‘my box width’ input parameter.
Fig.1. The VoltyChannel Stop indicator.
The other important thing with this indicator is the sound alerts. The sounds alert by default is set to false and require the trader to set them as true when trading in order to get the alerts. This alerts are very important especially to the forex beginners. They show the current level of the volty channel line. So if you have set the show price box as true, there is no need to set the sound alert to true. But if you have set the show price box to false, you may consider setting the sound alert to true. The two work to give the same thing which is the level of the line.
The red and blue lines should be considered as support and resistance levels.
VoltyChannel Stop indicator Using the Understanding how this indicator work to place and close orders.
VoltyChannel Stop indicator Placing sell orders:
Sell orders are placed at the onset of the red line formation. The stop loss should be placed at the level of the red line. Then as the red line continues to move down the stop loss is adjusted accordingly. There is no need to use take profits since the stop loss is adjusted till it gets below the order price level and starts acting as a take profit.
VoltyChannel Stop indicator Placing buy orders
Buy orders are placed at the onset of blue line formation. Then a stop loss is placed at the level of the blue line. The stop loss is then moved accordingly as the levels of the blue line continues to rise till the stop loss gets above the order price level and starts acting as a take profit.
Fig.2. Placing and closing orders using the VoltyChannel Stop indicator.
Download Free Forex VoltyChannel Stop indicator