Probarsar: A Technical Indicator for Financial Market Analysis
Trading expert Andrew Tjhai developed Probarsar, a technical indicator, in 2016.
This bespoke indicator has been tested over several years and has demonstrated a high degree of accuracy in predicting the direction of financial market price movements.
Probarsar calculates market volatility using the band idea and generates buy or sell signals depending on price moves above or below the bands.
This post will describe Probarsar’s operation, how to utilize it on the MetaTrader 4 platform, and its benefits and drawbacks.
How Probarsar Works?
Probarsar is founded on the premise that market volatility, or the degree of price change over time, influences price movements in financial markets.
Price fluctuations are more unexpected when volatility is high, and vice versa.
Probarsar measures market volatility using two bands: the upper band and the bottom band.
The bands are calculated by adding and subtracting a particular proportion of the price’s simple moving average (SMA) from the average true range (ATR).
The ATR is a measure of the average price range over a particular time, whereas the SMA is a measure of the average price over a specific period.
The multiplier is the proportion of the ATR that is used to compute the bands, and it may be modified by the user to their liking. The broader the bands, the larger the multiplier, and vice versa.
Probarsar creates buy and sell signals depending on the price’s location in relation to the bands.
When the price closes above the top band, the market is in an uptrend and buyers are in command. This is a buy signal, and the user can either initiate or exit a long position.
When the price falls below the lower band, the market is in a downtrend and sellers are in charge.
This is a sell signal, and the user can end a long trade or establish a short position. When the price is between the bands, it suggests that the market is consolidating or moving laterally, with no discernible trend.
In this instance, the user may either wait for a breakout or utilise other indications to confirm the market’s direction.
Uses of Probarsar on the MetaTrader 4 Platform
Probarsar is a free custom indicator that can be downloaded and installed on the MetaTrader 4 platform, which is a prominent trading platform that supports a wide range of financial instruments, including FX, equities, commodities, and cryptocurrencies.
- Download and save the Probarsar indicator file on PC.
- Open MetaTrader 4 and go to File > Open Data Folder.
- Go to MQL4 > Indicators and paste the Probarsar indicator file there.
- Restart MetaTrader 4 and launch the Navigator window.
- Drag and drop the Probarsar indicator onto the chart of the appropriate financial instrument after expanding the Custom Indicators folder.
- Adjust the Probarsar indicator’s settings to suit the user’s preferences. SMA period = 20, ATR period = 14, multiplier = 2.5, and shift = 0 are the default values.
- Follow the buy or sell indications based on the Probarsar bands and price movements on the chart.
Advantage and Disadvantage of Using Probasar
Probarsar is a straightforward and effective technical indicator that may assist users in identifying market trends and the best entry and exit locations for their trades.
It is applicable to any financial instrument, time range, or market circumstance.
It may be used in conjunction with other indicators like trend lines, support and resistance levels, and oscillators to improve trading success and eliminate false signals.
It may be customised by the user based on their trading style and risk tolerance.
When the market is in a strong trend and the price moves outside the bands for an extended length of time, it might create misleading signals, the user may lose out on profiting from the trend or incur losses by trading against it.
Because it is dependent on previous price data and does not account for future price swings, it might be sluggish and reactive.
As a result, the user may join or quit the market too late or too early, missing out on the best trading possibilities.
It is susceptible to market noise and volatility, particularly when the bands are too narrow or too broad.
In this instance, the user may receive too many or too few signals, making it impossible to sort out the trustworthy ones.
Andrew Tjhai developed Probarsar as a technical indicator in 2016.
It is a bespoke indicator that measures market volatility using the notion of bands and provides buy or sell recommendations depending on price moves above or below the bands.
Probarsar may be used to any financial instrument, time frame, or market scenario, and it can be used in conjunction with other indicators to increase trading success.
However, Probarsar has significant limits and downsides, such as erroneous signal generation, being trailing and reactive, and being impacted by market noise and volatility.
As a result, the user must exercise prudence and judgement when using Probarsar, as well as always maintain good risk management and trading discipline.