Price action steps are crucial for researchers because they serve as the foundation for technical analysis of Forex, stocks, and commodity price charts.
Many short-term traders base all their trading choices solely on price action and market bias that can be extrapolated from it.
To simplify price action for traders, beginners can now use basic MT4 indicators to detect potential trade signals automatically.
This guide explains assessing possible trading setups using the Bott Price Action Indicator for MT4.
What is the Bott Price Action Indicator?
The Bott Price Action Indicator represents an automatic chart pattern detector developed for MetaTrader 4 platforms. It can be used in MTF charts that enable you to simultaneously focus on day trading, scalping, and even intraday trading.
These indicators are a powerful tool for traders and investors to analyze the market and make the best possible trading decisions. These indicators give traders an edge in the market by providing valuable information on the direction of price movements. With the help of price action indicators, traders can easily identify entry and exit points and potential support and resistance levels.
Apart from determining trade signals, it measures the momentum of price movements, giving traders an insight into the current trend’s strength and whether it will continue. This allows traders to decide when to enter and exit trades better.
The indicators also provide technical analysis, helping traders to identify chart patterns, such as breakouts, reversals, and continuation patterns. This can give traders an understanding of the overall market sentiment and potential trade opportunities.
Bott Price Action Indicator Trading Strategy
While using the Bott Price Action Indicator, follow the NLS and NLB icons on the price chart, indicating the detection of potential buy-sell signals. These signals are also represented using the blue/red arrows for a better understanding of the current market bias and the possible trade direction.
After you spot the desired signal, try to match it with other price action factors. For example, an NLS bearish arrow plotted right below a long-term resistance can be an ideal setup for entering a sell entry.
Buy Signals
Here are the buy conditions of the Bott Price Action Indicator in MT4:
- The indicator displays an NLB icon on the price chart.
- A blue arrow appears right below the current candlestick low, pointing upwards.
- Enter buy after the chart prints a solid bullish candlestick pattern.
- Minimum take profit target: 2R (double your stop-loss budget).
Sell Signals
Here are the sell conditions of the Bott Price Action Indicator in MT4:
- The indicator displays an NLS icon on the price chart.
- A red arrow appears right above the current candlestick high, pointing downwards.
- Enter short after the chart prints a solid bearish candlestick pattern.
- Minimum take profit target: 2R (double your stop-loss budget).
Bott Price Action Indicator Pros & Cons
Pros
- A complete trend-following indicator.
- Adjustable to multi-timeframes in MT4.
- Delivers straightforward buy-sell signals.
- Suits all trading strategies.
- Equally effective in forex, stocks, and commodity markets.
Cons
- Doesn’t show the name of the potential candlestick patterns.
- Its signals may not work during flat market trends.
Conclusion
The Bott Price Action indicator is extremely useful for traders seeking an edge in the markets. They provide valuable information on price movements, allowing traders to make informed decisions. Additionally, a simple or exponential moving average alongside the Bott Price Action signal may boost your trading performance.
Self-confessed Forex Geek spending my days researching and testing everything forex related. I have many years of experience in the forex industry having reviewed thousands of forex robots, brokers, strategies, courses and more. I share my knowledge with you for free to help you learn more about the crazy world of forex trading! Read more about me.
