ZoneTrade indicator
To successfully trade in financial markets, it is necessary to conduct a comprehensive analysis of assets. For this purpose, various tools are often used that are able to clearly determine the direction of the trend, its strength and acceleration.
It is an integrated approach that gives clear signals, since determining the trend itself without a number of other parameters is practically useless.
For example, many of you have encountered a situation where, buying a certain asset on a clearly formed upward trend, the price stagnate for several days, or even weeks, practically in place, causing losses on the swap.
This situation haunts most traders, since many other factors besides the direction of the Forex market at the time of the signal were not taken into account.
The ZoneTrade indicator is a professional technical analysis tool that directly on the chart displays zones of an increasing or decreasing trend, as well as those gray zones that are commonly called flat.
The ZoneTrade indicator perfectly copes with the function of the main filter against false signals, and can also perform a signal function at the basis of almost any trend-oriented trading tactic.
Installing the ZoneTrade indicator
The ZoneTrade indicator was developed by programmers for trading in MT4 trading platform, so to use the indicator you will first need to download it at the end of the article on this site, and then install it directly into the trading terminal.To install the indicator into the trading platform, you will need to access the MT4 system folders. So, open your trading terminal and go to the file menu.
In the menu that appears, find the line “Data directory” and run it. A number of system folders will be displayed in front of you, among which find indicators and drop ZoneTrade into it. After you restart the trading terminal, the ZoneTrade indicator will appear in the list of custom Forex indicators.
To start trading, change the chart type from candlestick to line and drag ZoneTrade onto it. You will get a graph like this:
The principle of constructing the indicator. Trading signals
The ZoneTrade indicator is based on the principle of zone trading by Bill William based on his two indicators AC and AO. The AO indicator displays the strength and direction of the market (trend type) and the AC indicator displays the acceleration of the market.
Thus, Bill William, based on two histograms, identified a green zone when the bars on two indicators were green, a red zone when the bars on both oscillators were colored red, and a gray zone when the color of the bars did not match.
Actually, on the basis of this theory, the ZoneTrade indicator was built, and the correspondence of the colors of the AC and AO zones with the ZoneTrade indicator can be seen in the image below:
Due to the fact that ZoneTrade consists of two Bill Williams indicators, it can be used either alone or in combination with others Forex technical analysis tools. So, let's look at the signals when using the indicator without additional tools.
Buy signal:
1) The ZoneTrade indicator displays the candle in green.
2) The closing price of the second candle is higher than the closing price of the previous one and is colored green.
You should enter a position only when the candle closes, since the indicator is redrawn. Exit from a position occurs when the indicator color changes from green to gray or yellow. Example:
Sell signal:
1) The ZoneTrade indicator displays the candle in red.
2) The closing price of the second candle is lower than the closing price of the previous one and is colored red.
Entering a position only based on a closed candle. Let's look at the example below in more detail:
ZoneTrade can also be used as a filter for the main signal, so that the Forex strategy signal corresponds not only to the direction of the trend, but also to the acceleration that is necessary to quickly achieve profit.
In conclusion, I would like to note that the ZoneTrade indicator is an excellent adaptation of Bill Williams' zonal approach, which greatly simplifies trading using this method.
Download the ZoneTrade indicator