MBFX Metatrader 4 Channel Indicator
MBFX is a channel indicator, which later formed the basis of more than a dozen reversal strategies for binary options. Channel, called those indicators that allow you to build a channel of price movement and thereby determine the temporary highs and lows to find the most profitable entry points (for example, Bollinger Bands, Envelopes).
(For reference: MBFX and MBFX Timing are two different indicators.)
The indicator consists of 7 lines in different colors:
The blue line is the center of the channel;
Gray lines are the borders of the channel;
Red lines - the breakdown of the upper channel;
Green lines - the breakdown of the lower channel.
In the original, the signals of this indicator are considered to be the achievement of the price of red or green lines. However, it was experimentally found that the strongest signals occur when a graph breaks through all MBFX lines, i.e., either both red - BUY signal, or both green - SELL signal.
In the algorithm of this tool, there is a function of sound and visual alert of a signal.
The signals of this indicator are useful in building channel trading strategies.
Despite all the benefits of MBFX, it cannot be used alone. In order for the trading system to be functional and truly profitable, it is necessary to add at least one or two other indicators to filter signals. This reduces the risk of erroneous entry into the market.
As for the disadvantages of MBFX, it is worth noting the redrawing of lines in practice. This means that when new highs and lows appear, the channel begins to stretch, however, all indicators possess this property, the calculation of the values of which implies the use of the current price value.