Trend Indicator For MT4

Trend Indicator For MT4

The Trend Indicator For MT4 is a trend direction and strength indicator that prints an Aqua colored dot when the trend changes from down to up. Contrarily, a Magenta dot gets plotted when the trend on the current time frame changes from up to down. The indicator tends to whipsaw during consolidating market phases.

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Trading ideas with the Trend Indicator For MT4


This tool is for trend trading. With trend trading - the most crucial aspect thereof is that we need to get trend confirmation. We can achieve this using a few technical indicators in our aid of discovering in what trend the market is currently in.

Exponential Moving averages have proven over the years that it is a consistent and reliable indicator to use when it comes to drawing conclusions on the direction of the underlying trend.

It is achieved quite simply - just upload maybe two EMAs having a period of 21 and 50 and if the price action is above the 21-EMA and the 21-EMA is above the 50-EMA then the market is definitely trading in an uptrend. Of course, the opposite rules hereof are also correct in the case of wanting to confirm if the market is in a downtrend.

Beyond this approach - there is another approach we can look to adapting - and that involves using a customized indicator. The indicator that we shall be using for trend-confirmation purposes is the Trend Indicator. Such a simple name - it makes the description of its functionality self-explanatory.

It has two different colored dots to mark off-trend directional changes - the aqua dot is used to show that the market has changed into a bullish market and then the magenta dot tells us if the market has changed direction from an uptrend to downtrend. The image below expresses this explanation excellently.



The image above shows us the full representation of the indicator within the trading screen - it makes for easy trend-direction detection.

There is one major disadvantage that comes with using this indicator - that is that this indicator repaints. This is a drawback but you can overcome this drawback quite easily thus enabling you to maximize the benefits of using the Trend Indicator.

The best way to address or overcome this issue is to use the trend indicator on the higher times frames. That solves part of the problem though there is more to this.

Trend Indicator For MT4 - How To Use It Properly


To overcome the repaint con we will be adding support and resistance lines into the chart. However, you should use both the next higher time frame and the trading time frame to draw these lines as this would ensure that we have reliable support and resistance lines drawn. We can either use a pivot points levels indicator or the horizontal lines tool to draw support and resistance zones. In this instance, I will be going with the latter.

My trading chart is one-hour so I will switch over to the 4-hour chart to draw my support and resistance lines using the horizontal tool as illustrated below:



As you can see I have drawn in the S and R lines on the four-hour chart. Remember, that the dots further back in your screen will not repaint therefore you can connect two dots to draw your S and R lines. Then you can even go to the extent of adding in pivot point lines but I will not go that far.

I connect at least two dots and then check what is the last dot on the screen at the right-hand end of the chart. When that is done I repeat the S and R line-drawing procedure on the hourly-chart.



The image below shows the four-chart - our focus here is to check the color of the last dot on the four-hour time frame.



The last dot on the four-hour chart is blue or aqua this means that on the four-chart the trend direction is currently up. Then with my S and R lines are already drawn on this chart, I then switch down to my trading chart - one hour. You could go down as far as the 15-minute chart if you want.

Trend Indicator For MT4 - Buy Entries


I now know that the market is trading in an uptrend as confirmed by the higher time frame. Now on the one hour chart, I will wait for the aqua dot to form around the level of support as shown below:<



When that dot is formed then we can open a buy trade with my stop loss positioned at the last swing low. I will take profit when the reward in my trade is one-to-one with my risk.

Trend Indicator For MT4 - Conclusion


This method of trading using the trend indicator showed us how powerful this indicator can be for us even though it is an indicator that has a repainting element in it.

This was conquered by connecting the dots - no less than two dots were used to give us reliable support and resistance to trade off from when the market hints of making reversals in these different price zones.

 

About Me

I'm Mike Semlitsch the owner of PerfectTrendSystem.com. My trading career started in 2007. Since 2013 I have helped thousands of traders to take their trading to the next level. Many of them are now constantly profitable traders. 

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