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Probarsar: A Financial Market Analysis Technical Indicator

VWB Blog 2 months ago 27

In 2016, trading specialist Andrew Tjhai created the technical indicator Probarsar.

Tested over several years, this custom indicator has shown to be very accurate in predicting the direction of changes in financial market prices.

Probarsar computes market volatility using the band concept and produces buy or sell recommendations based on price movements above or below the bands.

The functionality of Probarsar, its advantages and disadvantages, and how to use it on the MetaTrader 4 platform will all be covered in this article.

What Does Probarsar Do?

Probarsar is based on the idea that price fluctuations in financial markets are influenced by market volatility or the extent of price change over time.

When there is high volatility, price variations are more surprising, and vice versa.

Probarsar quantifies market volatility using two bands—the top band and the lower band.

A certain percentage of the price’s simple moving average (SMA) is added to and subtracted from the average true range (ATR) to determine the bands.

While the SMA measures the average price over a certain period, the ATR measures the average price range over time.

To their preference, the user can adjust the multiplier, which is the percentage of the ATR used to calculate the bands. The multiplier increases with the width of the bands and vice versa.

Probarsar determines where the price is about the bands to provide buy and sell signals.

Buyers control the market when the price closes above the upper band. Based on this purchase signal, the customer can enter or quit a long position.

Sellers control the market when the price drops below the bottom band.

The user may initiate a short position or terminate a long transaction based on this sell indication. When the price is between the bands, it indicates no clear trend and the market is either consolidating or moving laterally.

In this case, the user may verify the market’s direction using other indicators or wait for a breakout.

Probarsar’s Applications on the MetaTrader 4 Platform

On the MetaTrader 4 platform, a well-known trading platform that supports a variety of financial products, including FX, stocks, commodities, and cryptocurrencies, Probarsar is a free custom indicator that may be downloaded and installed.

On your computer, download and save the Probarsar indicator file.

  • Select File > Open Data Folder when MetaTrader 4 opens.
  • Paste the Probarsar indicator file under MQL4 > Indicators.
  • Start the Navigator window after restarting MetaTrader 4.
  • After opening the Custom Indicators folder, drag and drop the Probarsar indicator onto the chart of the relevant financial instrument.
  • The Probarsar indicator’s parameters may be changed to the user’s liking. The default variables are shift = 0, multiplier = 2.5, ATR period = 14, and SMA period = 20.
  • Observe the price changes on the chart and the Probarsar bands to determine whether to purchase or sell.

Benefits and Drawbacks of Using Probasar

Probarsar is a simple but powerful technical indicator that may help traders find market trends and the ideal moments to enter and exit a trade.

Advantages:

It works with any financial instrument, period, or market state.

To increase trading performance and reduce false signals, it may be combined with other indicators like oscillators, trend lines, and support and resistance levels.

The user may alter it according to their trading preferences and level of risk tolerance.

Drawbacks:  

In situations when the market is in a strong trend, and the price stays outside of the bands for a lengthy period, this might lead to false signals, which could cause the user to miss out on opportunities to benefit from the trend or lose money when trading against it.

It may need to be faster and more reactive as it depends on historical pricing data and ignores potential future price fluctuations.

Consequently, the user could enter or exit the market prematurely, losing optimal trading opportunities. It is vulnerable to volatility and noise in the market, especially when the bands are excessively wide or tight. In this case, the user can get an excessive number of signals or insufficient ones, making it hard to identify which ones are reliable.

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