The Currency Heatmap Indicator MT4, as the name suggests is a quick and easy-to-use reference to gauge the strength of different currencies.
Using this indicator, you can get a good idea on the strongest and weakest currencies in the market.
The Currency Heatmap Indicator provides a bird’s eye view on the overall market and if you like trends, it makes perfect sense for you to trade the strong trending currency against a weak trending currency.
Using this Indicator, it allows you to quickly identify the strong trends and jump into the currency pairs to trade with them.
We strongly suggest that you use the Currency Heatmap Indicator as a filter to identify trending trading pairs and NOT to use it on its own.
It’s most useful to help you identify trending pairs but the entry will have to be with a good momentum indicator like our Simple Trend Trading.
When to go long using the Currency Heatmap Indicator?
The strength of the uptrend is rising when you see the Currency Heatmap Indicator turning green for the currency pair of your choice.
Following this, take a long position in the market.
Currency Heatmap Indicator: When should you go long
When to exit your long positions?
Exit your long positions when you see that the currency pair is changing its color.
This means that the previous bullish trend is now easing.
Alternately, use a risk-reward set up to lock in profits at steady intervals.
Currency Heatmap Indicator: When should you short
When to go short using the Currency Heatmap Indicator?
Identify the currencies that exhibit a strong downtrend.
This means, look for two currencies that are red and then take a short position immediately.
It is recommended that you capture the shift in the currency strength early on to make the most of the trend.
When to exit your short positions?
You can exit the position until the trend starts to change.
However, this can be a bit difficult in real-time.
Therefore, start with a fixed risk reward set up and leave the rest of your position open at break-even to take advantage of the trends when they are strong.
Where to set the stop loss using the Currency Heatmap Indicator?
Because these are trend based trading signals, it is recommended that you set your stops by identifying the recent pivot highs or lows.
Set your stop loss a few pips above this level.
Conclusion
The Currency Heatmap Indicator can be used to trade by itself.
However, this indicator is more of a reference indicator than a buy-sell indicator.
Therefore, for optimal results, it is recommended that you use the Currency Heatmap Indicator for reference and then apply your own trading strategy on the currency pair that you have identified.
How to Increase Your Winning Ratio with the Currency Heatmap Indicator MT4?
When you add the Stochastic Cross Alert Indicator and use it together with a proven trend trading system like the Elite Swing Trader or Simple Trend Trading System, you can only expect to achieve a better win ratio and better risk-reward ratio.
Recommended Time Frames
Technically speaking, you can use this MT4 indicator for all time frames.
However, the shorter the time frame, you will see more fluctuation and possibly more whipsaw which may cause small losses that can eat up your portfolio quickly.
We recommend that you use higher time frames like the H4 or even higher for better consistency.
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