The Range indicator for MetaTrader is not a trend-following indicator but rather an indicator that tells the volatility of the trend. It shows the rise or fall of volatility in the market. Simply put, it displays the average range of price movements for a trading asset.

The volatility of the market only becomes visible shortly after the candle formation. But the Range indicator detects the volatility of the current market using some in-built variables that track price dynamics.

These price dynamics are hidden from the naked eyes and besides, it’s a herculean task to calculate them. But the indicator helps to automatically track, calculate, and display the volatility of the market on your MT4 chart.

The Range indicator works primarily with market highs and lows. It calculates the market range by subtracting either the previous low from the current high, current close from current high or previous close from the previous high.

The indicator uses the obtained values to paint a continuous bar as market volume increases or decreases. With this information, as a trader, you can anticipate further price movement or a decrease in price volatility.

How to Trade With Range indicator

The above picture is an example of the Range indicator for MT4 on a EUR/USD chart. It has two signal bars – red and green. The green bars indicate a rise in volatility while the red bars tell that the market is losing momentum.

This indicator can come in handy if you want to trade the Forex market successfully. It helps you to make clearer technical analysis or market execution by merely looking at the Range indicator. It is even more powerful when combined with price action or any trading strategy.

In all, the indicator is best used as a confluence to filter your trade setups. It can help decide the optimal time to open, add more positions, hold or close a trade.The indicator does not give a BUY/SELL signal per se but displays the volume of the market.

For instance, you may need to be careful if your trading strategy shows a SELL signal but the Range indicator has moved significantly downward beyond the range. And the movement wasn’t induced by any news.

Similarly, you don’t want to be trading when there is little or no volatility to avoid a high spread. You want to trade with an edge and not against the odd.

Conclusion

The Range indicator for MT4 is a must-have indicator for day, intraday, and swing traders. The indicator does not tell the trend of the market neither does it give a BUY/SELL signal. It works with the volatility of the market which is calculated in range.

It is free to download, doesn’t consume much space, and is easy to use. What’s more, it is simple to read and so, a novice trader can use it as well.