Hey traders! Today, we're diving into the world of Quantile Price Analysis and how it can enhance your trading strategies on MetaTrader 4.
So, how does it work? Let’s break it down:
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The calculation involves taking the current close price and subtracting it from the close price of the last N (default is 30) period's defined X (default is 60) upper quantile. You also do the same with the lower quantile, defined as X (default is 40).
If both of these values (which are shown in histograms) are above 0, we're looking at an uptrend. Conversely, if both are below 0, it's a downtrend. If one is greater than 0 and the other is less than 0, it indicates a ranging market.
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Now, there's also a high-low mode you can use. Here, you calculate the current high price minus the close price of the last N (default is 30) period's defined X (default is 60) upper quantile, and the current low price minus the close price of the last N (default is 30) period's defined X (default is 40) lower quantile.
Just like before, if both values displayed in the histograms are above 0, it signals an uptrend. If they're both below 0, that's a downtrend. If one is greater than 0 and the other is less than 0, we’re in a ranging market.
This method does a great job of filtering out those pesky ranging bars, but keep in mind that it might introduce a bit of lag.
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When you see a Green Block at the 0 level, it indicates an uptrend. An Orange Block at the 0 level signals a downtrend, while a Gray Block at the 0 level means the market is ranging.
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