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#5 Range-bound trading (Following WellxAMA)

One of the easiest methods to distinguish range-bound conditions from trends is probably by looking at indicators.
I'd like to introduce one those indicators, which attentive readers may have already discovered on our site, called WellxAMA - a custom MT4 indicator.

Download (right click + save as)

wellxAMA.mq4

Indicator settings: you can use default, which are equally good.
(On the screen shot I used my own settings: 9, 3, 50, 2.0, 2.0)

Time frame: any

Currency: any

Here is the way it may help with detecting Raging and Trending markets:

Forex range-bound trading

Rules:

1. As long as the dots are of the same color - the current trend continues.

2. Whenever a WellxAMA dot changinges color - the trend changes to the opposite.

3. If WellxAMA draws a new dot with every new chart candlestick - the market is trending.

4. Whenever a dot is missing - it is an indication of a sideways moving market ahead.

(On the screen shot we can see that as an empty/bare thin brown line stretching alongside several candlesticks in a row) - this means a trend is pausing and we may encounter range-bound conditions ahead.

5. What direction to follow when the WellxAMA dots are missing? Stick to the previous trend direction = the previous WellxAMA dot color before the range occurs.

6. If you're in a trade when WellxAMA starts to range, consider tightening your stops. If you haven't started trading - you may want to keep out until the trend is resumed.



http://forex-strategies-revealed.com/


red vertical lines refer to 07:59 GMT candle.

niceee.. thnx

isn't this just a Parabolic SAR

no, it's not, although visually it has some similarities.

nice!!!

Hi Edward,

Thanks for the indicator. Is there anyway we can have the wellxAMA indicator to be displayed in a window below the chart ? I am thinking doing it that way may help make my chart less cluttered.

You would need some editing of the indicator code:

#property indicator_chart_window

should be replaced by:

#property indicator_separate_window

Regards,
Edward

Where can we get that WellxAMA indicator please? I can't find it in my MT4 platform.
Any body where can we download it. Thanks by: Boyax

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