The AutoTrendLines Indicator For MT5
Doing technical analysis is a huge part in the daily routing of many successful traders. However, if you are like me, having to do this everyday over and over again will start to annoy you sooner or later. This is where the AutoTrendLines Indicator For MT5 can step in and help us with a crucial part of the technical analysis, which is drawing trendlines. The indicator can automatically detect the most important trendlines and draw them on our charts. This can safe us a lot of time, especially if you add up the time saved after multiple days of trading.
In this short article I will try to explain the key points you have to pay attention to while trading with trendlines. Afterwards I will elaborate a little more on the advantages that the AutoTrendLines Indicator For MT5 can provide to us and how we can make use of them while trading based on trendlines. Additionally, I will quickly explain the settings of the indicator, which allow for full adaptation to best suite your style.
How to trade with trendlines?
Before you can trade based off trendlines, you first need to know how you have to draw them in order for them to be respected by the market. You can either do this step manually or simply let an indicator like the AutoTrendLines Indicator For MT5 do it for you. Generally, trendlines are drawn as a connection of two extreme points in the price action. Above you can see an example of an upward trendline in blue and a downward trendline in orange. I have also marked the two points that are connected by these two lines. We simply extend the trendlines into the “future” and watch how the price reacts to them.
There are basically only two things that can happen once price comes close to such a trendline. Either the trendline will hold and the price will bounce off it and change its direction or the trendline will get broken and price continues its movement. In case of a breakout, we will often see the breakout-pullback-continuation patter. You can see an explanation in the above image, but basically what happens is the following: First the price will break through the trendline (breakout), then a pullback towards the trendline will occur (pullback) and finally the price will bounce of the trendline and then continue its movement in the direction of the breakout (continuation). In general, entering after the retest is considered safer and can additionally give you a better entry price, which can maximize your profits.
As you can see, the most crucial part of all this trading method is the drawing of the trendlines and always keeping them up to date. This can sometime be somewhat annoying and thus using an indicator to automate this procedure is very advisable. The AutoTrendLines Indicator For MT5 does precisely that.
Settings of the AutoTrendLines Indicator For MT5
Above you can see the settings of the AutoTrendLines Indicator For MT5. Let’s have a closer look at each of them now. The first setting is called “line type”. There are two options you can choose from here. The first one is called “by two extremums” and the second one “extremum and delta”. These two calculation methods are not too different from each other honestly. Both of them use two extreme points to find and draw the trendlines. The second method does however add a delta variable to make the drawing of the trendlines a bit more dynamic and closer to the market conditions.
With the second setting “Left extremum side” you can define the number of bars to the left that should be used to find the left extreme point of the trendline. The more bars you include here, the more long-term the drawn trendlines will be and thus the more power they have. If you however use a super high value, price will rarely come close to them, resulting in very few trade opportunities for you.
The next two settings are fairly similar to the second one. Here you can set the bar at which the calculation of the right extremum can start. Having the trendline connected to the current candle or right next to it doesn’t make too much sense, so we want the extremum to be at least a couple of bars to the left of it.
The last three settings are only used to customize the indicators appearance. You can first change the width of the automatically drawn trendlines and second you can switch the color of each line individually to make it perfectly in accordance with your other chart elements.
How can the AutoTrendLines Indicator For MT5 help us trade trendlines?
As I briefly wrote above, finding the correct trendlines is the most critical part of when you want to trade with trendlines. Now while this isn’t hard to do, it is a very redundant task that will start to bore you after some time and thus can hinder the fun of trading. Many people will probably also just stop drawing the trendlines after a couple of weeks or month because they are too annoyed of it. This can have a severe impact on your results, because trendlines are always an important aspect in the markets, even if your trading strategy isn’t built around them. So, you can see how the simple method of automating the trendline drawing can positively influence your trading journey in many ways.
You can also set up the AutoTrendLines Indicator For MT5 in a way that it looks natural on your charts and doesn’t hinder you from successfully executing your trading strategies. Having the indicator on your charts all the time doesn’t really do you any bad and thus should always be done in order to benefit from its positive influences.
Trendlines can also not only be used as an entry point, which I explained above, but can also be used at potential areas to place your takeprofit at. Because trendlines are more dynamic than for example support and resistance levels, you can always get the most out of your trades. So, make sure to download this indicator and see its magic yourself.