I decided to write this post today in regard to one of our most popular MT4 Indicators the Value Chart Indicator. This indicator is one of the indicators you can use on its own or with other indicators to help with your trading.
The Value Chart Is A Dynamic Indicator
The Value Chart Indicator draws bars over a dynamically created scale from the last highest to the lowest values over n period. It attempts to spot market oversold and overbought areas on a short time scale. This is when it would be a very high probability for the price would revert to its mean value.
Most MT4 Value Chart Indicators are drawn on a chart using candlesticks without coloring or with basic coloring. We are looking for the bars which close above or below the marked areas like in the picture below.
The Prestige Value Chart Indicator
At Prestige Trading we like to put our own spin on things and we decided to code it a little differently. When I am trading I hate noise, I want my brain to not have to work very hard so I want the indicators function to stand out. What I mean by this is I want the indicator to look dull when it’s not alerting a signal. As you can see below, our MT4 Value Chart Indicator stays grey until it closes above or below the signal areas. This is so you can easily see when a signal is firing.
The Value Chart is an indicator I have used for many years. I personally like using it for scalping. I combine it with the Linear Regression Channel to create a really high probability scalping setup. In this simple setup, we look for the market to overextend on value and also trend, it works very well.
The Value Chart was developed to show the valuation of the market, it could be described as a DeTrended Oscillator in which the higher or lower the value on the Value Chart, the more likely the market is to reverse direction, this is why it is so powerful. I generally do not use this for trend trades, I use it to find a counter-trend trade or scalp the markets.
Let’s See It In Action
Meta Trader 4 is a great trading platform to use the mt4 value chart indicator on as its usually free to use Meta Trader, it has forex as standard with live data and the indicator looks great. Here are some more examples of the indicator in action.
As you can see above the MT4 Value Chart Indicator highlights over value or under value on the chart and there is usually a spike in either direction. Note that it does not change trend direction, it just usually means that the next few bars will be higher or lower. This makes it incredibly powerful.
Same for the above picture, note how the overextension on price after a huge increase or decrease in price, this usually triggers a signal. It would be a very high probability trade to take the next bar in the opposite direction. This means in simple terms you could short reds and long blues.