# Quarters Theory Indicator

As mentioned by Ilian Yotov in his book, “The Quarters Theory: The Revolutionary New Foreign Currencies Trading Method, the Quarters Theory applies Math to detect a trend’s direction. In this guide, we’ll talk about what the indicator is and how you can trade it.

## What is the Quarters Theory Indicator?

The Quarters theory indicator works on the principles of the Quarters Theory. The theory splits the 1000 pip range between the whole numbers of a forex pair price into four equal portions, referred to as Large Quarters. Each 1000-pip range comprises four large quarters, each with 250 PIPs.

Large Quarter Points are the numbers that mark the beginning and end of each Large Quarter. These LQPs act as levels of support and resistance.

## Quarters Theory Strategy

To trade with Quarters Theory, you have to look at the targets. If the price moves upwards and hits the first target, there is a chance that it’ll hit the next Large Quarter (250 pips).

On the other hand, if the price moves downwards and hits the first target, there is a chance of slipping to the next Large Quarter.

To confirm the direction of the price, you can add additional indicators like Moving Averages and RSI.

It’s important to remember that the Large Quarter is considered finished when a specific Large Quarter Point is reached. If the price does not complete a Large Quarter, it’s a sign of a reversal, and the price can move to the previous LQP.

You can use the Quarter Theory on all timeframes. For this, you have to apply the 100-pip range. It divides two whole numbers of a forex pair into four parts, called Small Quarters. So, we have 25 pips per Small Quarter Point. It is especially useful if you are a scalper or a short-term trader.

• The price must touch the first Quarter.
• Confirm the trend’s direction by applying the Moving Average.
• Enter in the first Quarter.
• You could place a stop-loss at the recent low.
• You could set take-profit at the next Quarter or exit the trade if the price fails to reach above the Quarter.

### Sell Signal

• The price must touch the first Quarter.
• Confirm the trend’s direction by applying the Moving Average.
• Enter in the first Quarter.
• You could place a stop-loss at the recent high.
• You could set take-profit at the next Quarter or exit the trade if the price fails to reach below the Quarter.

## Quarters Theory Pros & Cons

Quarters Theory is not popular but can work well with other confluences. Here are the pros and cons of trading with the indicator.

### Pros

• The indicator provides tighter stop-losses.
• It works on all timeframes.
• It can be used for all trading styles.

### Cons

• The indicator may seem confusing.
• It may not work properly during news events.

## Conclusion

The Quarters theory indicator uses the Quarters principle to tell the trend’s direction. It combines whole numbers and uses the 1000 pip range (longer timeframes) and 100 pip range (shorter timeframes) to mark trend continuation and reversals.