The Precision trend (histo) Indicator For MT4
Table Of Contents:
- The Precision trend (histo) Indicator For MT4
- Trading With The Precision trend (histo) Indicator For MT4
- Precision trend (histo) Indicator For MT4 Conclusion
The Precision trend (histo) Indicator For MT4 is an indicator that shows the direction of the trend. The indicator has a good balance between reacting fast to the price action and not being to choppy (filtering the noise of sudden price moves).
As with most trend based indicators, you can use the Precision trend (histo) Indicator For MT4 very profitable too, provided that you know what's important in trading. In this article I will show you a way to get a bigger edge over the market, than you would get if you simply put the indicator on a chart.
If you know me already then you also know my trading style which I teach to trade for all of my trading systems.
With that trading style I mean that you should always use the bigger time frame in conjunction with the signal time frame. You should only select those signals that are in harmony with the bigger picture.
Studies of hundreds of trades with my trading systems have shown that using a bigger picture filtering approach can raise the winning percentage from 57% to up to 80%! The studies are confirmed by members of my community.
With signal time frame I mean the time frame where you search for an entry signal.
The bigger picture of the market situation can be seen on time frames that are 4 to 8 times bigger than the signal time frame. E.g. if you search for signals on the time frame H1 then the time frame H4 would be a good candidate for the bigger picture. If you use H4 as the signal time frame, then the time frame D1 could act as the bigger picture time frame.
And with the Precision trend (histo) Indicator For MT4 you can do the selection of the bigger time frame very easy, as you will see below.
With the bigger picture filtering approach you can have the same boost in profitability when you apply trend based trading with the values of the Precision trend (histo) Indicator For MT4.
I will now show you how you can raise the profitability a lot.
Trading With The Precision trend (histo) Indicator For MT4
The first secret to your success in trend trading with the Precision trend (histo) Indicator For MT4 (and probably with every other trend indicator) is that you only trade the first signal within a new trend.
This should be common sense for every trader, yet so few people incorporate that concept into their trading and it's easy to apply with the Precision trend (histo) Indicator For MT4.
Why is the first signal of a new trend the most profitable signal?
It's because at this early stage of the trend you have the highest probability that the trend will resume (trend makes a further move). As a result, if you only trade the first signal then you will have a much bigger winning percentage. As a side effect of entering early into a trend, you will also have on average the biggest winning trades because if you enter early into a trend then you can enjoy riding the trend.
This concept is so easy but most traders ignore it. I assume it's partly because of a lack of trading knowledge (newbie traders) and if an advanced trader does not use the concept, then it's probably because of impatience. Even most advanced traders do not want to wait for highest probability setups. They enjoy the action, the thrill of having a position opened more than being successful in trading.
With the bigger picture filtering approach that I will show you now, you will filter more than 90% of the signals of the signal time frame. This ignoring of 90% of the signals is the key point to get profitable as a trader. I can't stress that point enough.
To apply that concept with the Precision trend (histo) Indicator For MT4, you need to put the indicator 2 times on your chart with different settings.
First put the indicator onto the chart with 4 times higher values for each of the 2 parameter. You remember the bigger picture concept: use a roughly 4 times bigger time frame for the bigger picture. In this case use the value 120 for the "Average Period" (instead of default 30). And use the value 12 for the "Sensitivity" (instead of default 3). These settings will produce your values of the bigger picture that you will need to filter the entry signals.
Next put the Precision trend (histo) Indicator For MT4 with default values onto the same chart:
Now you have a great filtering system to trade only the first signals of a new trend which can boost your profitability by 100%.
So how to use the filtering system?
It's easy: In the following screenshot you can see the beginning of the downward trend indicated by the bigger picture settings of the Precision trend (histo) Indicator For MT4. I have labeled the beginning with "1. Bigger trend gets bearish". After the bigger trend got bearish, you wait until the smaller trend (the signal time frame = the default settings) gets bullish and then turns bearish. It's important that while the smaller trend changed the trend direction, the bigger trend did NOT change the direction. The bigger trend stayed bearish.
As soon as the smaller trend gets bearish, your sell entry signal is generated by the Precision trend (histo) Indicator For MT4 and you can ride the downward trend:
The same concept but in opposite direction can be used to detect highest probability buy signals.
You wait until the Precision trend (histo) Indicator For MT4 with the bigger picture settings turns bullish. Then you wait until the smaller picture gets bearish and then bullish again. This gives you the entry signal and you can ride the upward trend.
Precision trend (histo) Indicator For MT4 Conclusion
There is no holy grail indicator out there that will do the work for you. Also the Precision trend (histo) Indicator For MT4 in itself will not make you profitable. You as a trader need to connect the dots to get a big advantage over the market. Filtering 90% of the signals and only trade the first signal within a new trend can do the magic for you.
Enjoy this indicator and concept :)