Where to place a stop-loss on an open trade? This question will be answered by stop loss indicator ATRonChart, which I am going to tell you about today. It looks like Bollinger stripes on the chart. However, the algorithm of this indicator includes the readings of another basic instrument of market analysis – ATR. The curves on the chart indicate the current market volatility.
Install stop-loss indicator in MT4 terminal will be easy. You have to follow the usual pattern.
Come into MT4. From the menu, select “File” and then “Open data directory”. The window with terminal files will open. We are interested in the “MQL4” folder and the “Indicators” folder in it. That’s where the indicator file should be inserted. I’ll give you the link to download it at the end of this article. And don’t forget to reboot the trading terminal after all these manipulations or update the “Indicators” tab in “Navigator”.Now about parameters.It’s a little bit, and the important one is one. It’s an ATRPeriod. The location of the indicator lines will depend on its value. The more ATRPeriod, the closer the indicator lines will be to the price level. And vice versa. The smaller the ATRPeriod, the further the indicator lines will be from the price level.The ATRFactor parameter can be used to change the appearance of the indicator lines.
In general, you will have to experiment with the settings. They may vary depending on which currency pair is being traded and on which timeframe.
Application of the indicator in trade
In the chart it looks like this:
It was originally intended to determine the level at which the stop-loss should be set. For this purpose ATRonChart.lines are used
Some traders are not limited to using the indicator only to set the SL. It is also used to identify entry points into the market. This is usually done on small timeframes. The strategy is simple. When the price of a traded currency pair touches one of the indicator lines, a deal opens in the opposite direction. The profit is small – 10-15 points. But I want to warn you right away that such trade requires experience. Therefore, I would not recommend using this indicator for newcomers to get signals for opening trading positions. It’s better to use it only to install stop-losses.
For ATRonChart, there is a common rule for all market analysis tools. Its operation should be tested in demo trading before it is installed on the chart of a real trading account.Download stop loss indicator:ATRonChart