value area indicator mt4

value area indicator mt4

The Market Profile Trendline indicator illustrates the speed of price changes over time and highlights the most critical values, price levels and control values for a given trading session.

The indicator is created by combining information on volume, time, and pips that occur at certain levels during a predetermined period of time.

This article will delve into how the MP Trendline indicator works and how to utilize it in your trading strategy.

value area indicator mt4

What is the Market Profile? Trendline Indicator?

The Market Profile indicator was created by a trader at the Chicago Board of Trade (CBOT). The original goal was to display time and price data during the trading session in an easy to understand manner.

The indicator MP Trendline is different from traditional indicators because it has those trendlines. It also analyzes the areas of the market or currency pair where the largest price movements occur at any given moment.

This uses the most accurate tick data to calculate each market tick or change. The Market Profile Trendline indicator uses this to produce a histogram.

The histogram shows the locations where there is a lot of trading activity and price movement at specific price points and areas. From left to right, the indicator Market Profile Trendlines produces a histogram. Contrary to the standard left-to-right format, this is helpful for focusing on the current trading session without making the chart cumbersome.

By using this indicator, you will always be aware of the most important pricing levels and the price areas that will influence future price changes in any given market.

This Market Profile Trendline indicator can be applied to the time frame between M1 and D1 and shows the profile used for trading time. This indicator is based entirely on price changes and does not utilize the normal MetaTrader indicators.

value area indicator mt4

How to use the indicator Market Profile Trendlines?

This is the main purpose of the indicator Market Profile Trendlines.

Prices fluctuate between lows and highs, depending on buy sales and buy orders, as the market develops throughout the process. The indicator calculates the sum of volume, time and tick data. A value range is created.

This price range is the midpoint between the current demand and supply levels. Together with the value area, it is also represented by two tails, i.e. the top and the lower market profile.

Market Contour Trendline Indicator for Trading Strategies

The price range rejected by the market is reflected by the large tails above and below the value range. The bottom tail informs us that buyers beat sellers at these prices. However, the top tails inform us that sellers beat buyers at their respective price levels.

Buy Setup

Find the tails located at the bottom of the chart.
Be patient and wait for the price action to turn bullish.
Set a stop loss near the nearest low
Quit when the trend changes direction.

Sell Setups

Find the highest part of the chart
Watch until the market price turns bearish
Set a stop loss near the nearest high
Quit when the trend changes direction.

Summing up

The Market Profile Trendline indicator is a great tool for pinpointing each price movement at a given time. It is recommended to use this indicator together with other technical analysis (e.g. simple moving averages) to confirm the direction of price movement.

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