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A newbie trader once said: “If only I knew where other traders set their Stop Losses, my trading performance would significantly improve.”
At the time, it seemed to that trader that it is nothing more than a naive dream and he/she couldn’t even imagine that today we have an opportunity of using this indicator and even more in our favorite MT4 terminal.
StopLossClusters (SLC) indicator displays the levels where the maximum number of Stop Losses is set by other market participants.
The indicator shows two clusters of Stop Losses at the same time – the first one is above the current price and the second one is below it.
Line width can help you determine the total volume of orders on one or another bar (candle).
Where to Use It
The indicator is well suited to intraday trading and works great on
The most precious thing in the “Trading Against the Crowd” strategy is to know where Stop Losses of other market players are placed.
With this information, a trader can skillfully avoid hazardous areas while placing Stop orders or intentionally move Take Profit in the area of Stop Losses cluster.
This indicator is used to:
- Determine profit target and set Take Profit.
- Set Stop Loss properly.
- To a lesser extent, define a trade direction.
Given that price often reaches these clusters of Stop Losses and makes them trigger (at that, one can say “Analysis has worked”), a trader can rely on improving own strategy performance using this Indicator.
You can use the Stop Loss Clusters indicator as an addition to your already working strategy or as the basis for developing a new one.
Anatomy of the Indicator
Data from the Order Book server are considered to be basic data for this indicator. You can see two quadrants with blue histograms on its left side – they are Stop Losses placed by market participants.
To identify clusters, Algorithm will alternately search all the values of levels from the order book until it finds 7 adjacent levels, the sum of which is the maximum. You can see the given sum on the chart. Afterwards, the level showing the maximum trading volume will be selected from these 7 levels and will be used as a reference level for plotting the line of the StopLossClusters indicator on the chart.
Like all the indicators using external data for constructing charts, the given indicator is not subject to repainting and also has a certain data update interval.
The interval between the indicator’s values is 20 minutes. Delivery of data into your terminal might take a few more minutes (usually 1-3 minutes).
The SLC indicator was developed to simplify a visual perception of clusters formation dynamics so this indicator is represented as a chart having lines that varies in width.
This is the chart that enables us to see the lifetime and volume of cluster and actually define if it’s true.
It’s no secret that false large trades that might look like a significant cluster occur in the order book. Such trades are usually short-term so the SLC indicator can easily cope with their filtration.
The SLC indicator can help a newbie trader to learn the market mechanics relating to the interaction of price with such areas of clusters.
Basic Features of the Indicator
To simplify your introduction to the indicator, we have chosen its most essential features:
- Cluster volume. Lines display not only the price level of cluster formation but its volume as well. Visualization is achieved through various widths of lines.
- Cluster stages. The indicator supports 3 stages of cluster – each subsequent line has a greater width. You can manually customize the volume corresponding to every stage.
- Label and prompt. You can see a text label showing volume size at the last bar at the end of chart. You can also call the prompt indicating volume size on any other bar just by placing the mouse cursor over the line of the StopLossClusters indicator. This option needs to be enabled in settings.
- Displayed data period. The SLC indicator takes fairly much of your chart space so many traders may find it convenient to limit the displayed history to 1 day or even to the last cluster.
For your convenience, we have also introduced the system of Automatic Update for indicators. Now you need only to restart your terminal to get the latest versions of the indicators. This indicator will remind you of it in a separate window.
When developing indicators, we strive to be as responsive as possible to the needs of users. You can use most of our indicators right out of the box but the most demanding clients can customize the indicator to their liking.
1-3 Stage Max Volume. Specify the minimum percentage value that corresponds to every stage.
Line Width Pattern. The setting sets up width of lines in pixels for every stage. For example, 1-3-5 sets up width of lines as 1 pixel for the first stage, 3 pixels for the second one, and 5 pixels for the third one.
Limit Displayed Data. The setting sets up depth of the history (including the history available on your hard disk) that this indicator attempts to display. Downloaded history is directly dependent on the selected subscription plan. You can accumulate and display the history exceeding the limits of a subscription plan – it’s not illegal.
Color Scheme. This indicator automatically detects light and dark backgrounds and applies the relevant color scheme.
Line Color. You can use it to select the color for the indicator lines.
Extract the .zip file into the MQL4/ folder of your trading terminal. Click the link below for more details:
Indicator will work in a trial mode after installation. You need to subscribe to a plan to have full access.
Should you have any difficulties, please contact us.