The Chart Projection Indicator just sketches on the forex chart where the price will possibly travel in the near future and where the reversal will likely be. The indicator is exclusively for MT4 charts. Chart Projection is a strong market trend indicator based on the Zigzag indicator, which analyzes the market process based on the algorithms and patterns indicated in this indicator, and forecasts the market trend in the hours and days ahead based on mathematical principles.
What is the Chart Projection Indicator?
The Chart Projection Indicator is a technical tool used by forex traders that seeks to predict what trend will be in place in the near future (bullish or bearish) so that traders may open appropriate positions after receiving confirmation signals. It also attempts to predict when a bullish or bearish trend will terminate so that traders with open positions may close them as they see appropriate. The preceding price activity is shown by the green ZigZag line. The projected price action is represented by the orange ZigZag line. The green rectangles represent the predicted zones of support and resistance. When displayed on the chart, the indicator may indicate when a price reversal from a resistance or support zone is near.
Chart Projection Strategy
The Chart Projection Strategy is a technical technique based on the traditional technical ZigZag indicator and autonomous optical algorithms. The ZigZag indicator divides the price chart into bullish and bearish waves. The bullish and bearish waves are then analyzed by optical algorithms, which identify so-called Points of Interest (POIs) and utilize them to forecast future price movement. These optical algorithms have several versions, including Simple, Simple Specific, Flexible Specific, Longscope Simple, Longscope Flexible, Complex, S+R, and Original.
Buy Signal
The following could be your checklist for a buy trade:
- When the market is up trending.
- When price reaches the bottom point of the orange zigzag line.
Once these two events occur:
- You could open a buy position after price hits the bottom point of the orange zigzag line and you get your signal confirmation.
- You could set your stop loss just below the nearest swing low.
- You could set your take profit at the nearest resistance zone, or you could exit trade when price hits the upper point of the orange zigzag line.
- For good risk management, I would only consider trades with a risk to reward ratio of at least 1:2.
Sell Signal
The following could be your checklist for a sell trade:
- When the market is down trending.
- When price reaches the upper point of the orange zigzag line.
Once these two events occur:
- You could open a sell position after price hits the upper point of the orange zigzag line and you get your signal confirmation.
- You could set your stop loss just above the nearest swing high.
- You could set your take profit at the nearest support zone, or you could exit trade when price hits the bottom point of the orange zigzag line.
- For good risk management, I would only consider trades with a risk to reward ratio of at least 1:2.
Chart Projection Pros & Cons
Pros
- The Chart Projection Indicator helps in pointing to future price, easing some analysis burden on the trader.
- It is said that optical algorithms look at charts in the same manner as humans do. The indicator simulates human behavior in this manner.
- The indicator helps show the relative strength of a currency and the strength of the prevailing trend.
Cons
- The Chart Projection Indicator may have difficulties with checking on the history.
- The technicality of the indicator may be a bit confusing initially.
Conclusion
The main function of the indicator, as the name indicates, is to forecast possible future price movement. It employs the technological indication ZigZag, as well as “hidden” optical methods, for this purpose. The Chart Projection indicator may also be used to automatically establish support and resistance zones, define trend strength, and create non-standard price charts. Of course, the Chart Projection indicator does not miraculously forecast the future, but it may be beneficial for new Forex traders because it is simple to use, including for risk calculation.
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