We present you a custom indicator by Varchev Finance which can be downloaded from the following link. To use it you should follow the instruction written here How to add an additional indicator to the Meta Trader 4 platform.
How does the indicator actually work:
Varchev Median Change measures the change in the median value of two consecutive Japanese candles (two consecutive bars). The median which variance is measured can be plotted using Simple Moving Average with period 1 and type (H + L) / 2 as shown in the picture below:
Varchev Median Change can visually help you find markets's consolidations, and after the price leaves the consolidation zone, you can position yourself in the direction of the breakout. The indicator works for all time frames and can be used for several adjacent time periods to find close to perfect positioning. /! The indicator may also be used when configuring a EA system /
Also, if you look at it for a long time, divergence can also be observed - when the price is lower and the median change is not big enough:
If you use the indicator in a robotic system, you can calculate the sum of the last n candles and, when the sum is close to 0, this is a consolidation signal. It is good to keep an eye on and not have too much change in the set of median changes.
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World Financial Markets - 0700 17 600 Varchev Exchange - 0700 115 44
Varchev Finance Ltd is registered in the FCA (FINANCIAL CONDUCT AUTHORITY) with a passport in the United Kingdom: FCA, United Kingdom - registration number: 494 045, which allows provision of financial services in the United Kingdom.
Varchev Finance Ltd strictly comply with the statutes of the European directive MiFID (Markets in Financial Instruments). targeting increased efficiency, transparency and uniformity of financial instruments.
Varchev Finance Ltd is authorized and regulated by the Financial Supervision Commission - Sofia, Bulgaria: License number RG-03-02-05 / 15.03.2006
The information on this site is not intended for distribution or use by any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.
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