The Extreme Spike is a price-action-based technical indicator designed to identify highly probable bullish and bearish spike signals in MetaTrader 4 (MT4).
In financial trading, a spike refers to a rapid, aggressive, one-directional price movement occurring within a very short period. Both day traders and intraday traders view such price actions as opportunities to make quick and substantial profits.
However, spotting reliable spikes can be challenging since their timing and direction are unpredictable. Moreover, sitting in front of the chart all day, waiting for sharp price movements, is impractical.
The Extreme Spike indicator continuously monitors price behavior and alerts traders to potential market trends in advance. Additionally, it detects market highs and lows, pointing to critical price swing zones. This article will explain how to use the Extreme Spike Indicator in MT4 to make profitable buy-sell decisions.
How to Trade Forex and Stocks Using the Extreme Spike MT4 Indicator
The Extreme Spike Indicator shows colored dots in the indicator window, signaling an upcoming trend movement. The position of these dots on the chart indicates whether a bullish or bearish price movement is expected.
This indicator plots trend reversal signals during extreme overbought or oversold market conditions. Therefore, besides trend-based price breakouts, traders can also assess swing trading opportunities. With this strategy, traders can target buys at lows and sells at highs, increasing their profit margins.
Once the price begins to spike or move in one direction, the indicator plots a large signal bar confirming a solid trend-following rally. It’s important to note that this bar does not provide a buy or sell confirmation; it only indicates that the price is steadily moving in a definite direction.
Traders should look for trading opportunities whenever the indicator delivers dot signals, indicating an upcoming trend reversal. It is advantageous if these price swing alerts can be matched with candlestick patterns at key support and resistance levels.
It is recommended to avoid strictly following the price spike signals during the announcement of sensitive news. Such events can alter market sentiment, potentially leading to adverse trading conditions. Other than that, the Extreme Spike is an excellent indicator for all trading sessions.
Conclusion
The Extreme Spike Indicator is ideal for MT4 intraday traders who thrive on the price volatility of forex and stock markets. By following the indicator’s spike signals, traders can catch major trends in advance. Additionally, activating the alert service can help traders capture every significant price event in financial markets.
