Snake borders indicator is a sleek piece of software developed for the Metatrader 4 platform. It uses High, Low price calculations from preceding bars. You can specify the maximum and minimum number of period settings. The indicator creates a band where price is more likely to live within.
Snake borders indicator for Metatrader 4 is a neat little tool, if you plan on taking very short-term- trading as a career. Not that it doesn’t work for swing trading or position trading. It’s because the dynamics of the strategy for Snake borders, sometimes requires taking trades against the trend.
The term – trend, is subjective and depends on the time frame you are trading. However its a very profitable habit to always look for the next impulse move to the same direction of the trend. If you are uncomfortable taking short-term profits against a possible long-term trend, you can use filtering to take trades only in the direction of the main long-term trend.
Snake borders indicator strategy
Without further ado, let’s dive into the strategy.
Buy signal is when price closes below the lower boundary.
Sell signal is when price closes above the upper boundary.
For more conservative trading, you can use both open and close of a single bar, above or below the boundary to trigger the signal. None the less the idea is to expect a breach of the opposite boundary.
On this image arrow color represents trade outcome:
Green: profitable buy trades
Red: profitable sell trades
Blue: break-even trades
Yellow: Loss trade
Stop-loss placement is totally discretionary. Let me rephrase that, stop-loss levels are totally discretionary, not stop-loss itself.
Take-profit is when price reaches the opposite side of the snake borders indicator boundary. However if price happens to breach the same side of the boundary while you are in a trade, then close the trade manually. It could be a sign that a trend of a higher degree is just starting to form or already in progress. At this point you must avoid taking trades against the trend. More importantly, cross check with higher time frames to confirm the direction of the trend.
Once you see a complete bar (including the wicks) open and close inside the boundary, move SL to break-even. If the break-even level is too close to the price, wait for another bar.
Trail stop-loss if necessary. But make sure that you give enough room for the trade to play out as well. Once I manage to move stop-loss to a break-even position, I usually don’t mess with the trade. Because it’s basically a free trade.
If you find trading with Snake borders indicator a useful strategy, please share your experience in the comments below. Don’t forget to share this strategy with your trading colleagues and friends.