The Dots Method Indicator mentions multiple times on the chart. This guide will mention the indicator and how you can trade it.
What is the Dots Method Indicator?
The Dots (daily open trading system) is an intraday indicator of forex market times. The indicator shows four times on the chart. These times can make trading in London and New York sessions easier.
This is what the indicator shows:
- Local – time in your location.
- Broker – time of the broker.
- New York – time of New York session.
- GMT – mentions GMT.
The Dots Method Indicator also has a premium version with buy and sell signals. The indicator draws the target levels at the opening of each trading session. These levels act as support and resistance levels, and once the price touches these levels, it presents a buy or a sell signal.
Dots Method Indicator Strategy
As the free version only tells time, you need to combine the indicator with technical indicators or other analyses like finding charts and candlestick patterns.
One way to use the Dots Method Indicator is to apply multiple moving averages on the chart. For the strategy, you have to add three moving averages of 50, 100, and 200 periods. These MAs confirm the direction of the trend.
You can take a short position when the price breaks below the moving averages. Conversely, you can go long when the price breaks above the MAs.
Remembering that all the MAs must align to apply the strategy is important. For instance, if the price breaks below, the first MA should be 50, then 100, and finally 200.
You can also combine the Dots Method Indicator with RSI to find trading divergences or look for overbought or oversold levels.
The Dots Method Indicator is irrelevant to the timeframe so you can use it on all timeframes.
Buy Signal
- The price should move above all the MAs.
- Wait for the price to continue upwards and then enter at the second candle.
- Place a stop-loss at the recent swing low.
- Set take-profit at the previous high or exit the trade when the price goes below any of the MAs.
Sell Signal
- The price should move all the MAs below.
- Wait for the price to continue downwards and then enter at the second candle.
- Place a stop-loss at the recent swing high.
- Set take-profit at the previous low or exit the trade when the price goes above any of the MAs.
Dots Method Indicator Pros & Cons
Here are the pros and cons of the Dots Method Indicator:
Pros
- The indicator plots multiple times, so one doesn’t have to check the time manually.
- The Dots Method Indicator alerts at the start of the New York session.
Cons
- The free version has limited options.
Conclusion
The Dots Method Indicator talks about multiple times, and you need to combine it with other indicators to find the trend’s direction. The indicator has a pro version with target levels and can mention the buy/sell signals.
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