Hysteresis for MT4

Hysteresis is a natural phenomenon that appears in magnetism, elastics, cell mitosis and control theory (e.g. thermostats). These systems exhibit path dependence in which the current state depends on the path taken to achieve it. The system has memory and the effects of the current input are only felt after a delay or range threshold is exceeded. Many people believe that markets also need time to respond to new information and that response does take into consideration recent market history. This market mode filter requires price to close below the low of the channel before switching into a bear mode.