Trend lines are important trading signals. This indicator takes the guess work out of finding them.
It detects the straight line path of a trend using the same algorithm as our support/resistance indicator. It detects trend lines by finding the support & resistance points around it. This way you know precisely where the real path of the trend lies. Knowing the true trend line can help you to enter the market with high probability “trend following” trades.
The indicator will:
- Discover trend lines at any time frame
- Allow you to filter to show more or less trend detail
- Output the strength of each trend line
- Show support and resistance areas
- Create trader alerts
Moving averages such as SMA or EMA only give you part of the picture in trend trading. This is because they don’t tell you exactly where the trend is located or its “average direction”. Nor do they show where it starts or finishes.
This indicator outlines the underlying trend by locating it’s support and resistance points. From this you can more easily see where the turning points are and the exact path that the trend is following. See Figure 1 for example.
It will pick up new trend lines as they are forming and alert you if the price is near an existing trend line support or resistance. The indicator can raise an alert through the Metatrader terminal. These can be switched on or off as required. It can send terminal alerts, SMS or email – when you have these configured in Metatrader.
It will find trends of any size, even if they span years. This lets you see if the price is nearing a resistance or a support area that could be a potential point of reversal.
Each trend is labelled with a timestamp so it is clear exactly when the line was first detected. The trend strength factor is also displayed on the chart and you can filter on this to hide weaker trends.
The example below shows the indicator displaying a one year long trend in EURCHF H4. Weaker lines have been filtered using the input settings.
The next example shows a +1 year trend in EURGBP (four hour chart H4). In this example the detector finds two intersecting subtrends along the main trend line.
Finally, this example shows detection in EURUSD five minute (M5) chart. The green line shows the simple moving average line (SMA-200). Here you can see while the SMA line traces the path of the price it doesn’t give very much information about the trend. On the other hand the trend line indicator shows the “mean axis” of the two main trends. It also highlights the support and resistance points.
The indicator is designed to be very easy to use. It has some basic settings so that you can adjust it to detect in any chart. It allows you to display more or fewer trends, as well as trends of different sizes. The first four settings let you set how much detail will be displayed.
- Bars to analyze
- Minimum line strength
- Line detail
To detect longer trends, adjust up the “bars setting”. For smaller trends, and to display more detail, adjust it downwards. To detect all lines, set minimum strength threshold to zero. To filter weaker lines increase this value gradually up to 1. Lower sensitivity means the price can deviate more from the trend line. Line detail gives three settings from low to high.
There are two processing modes: Normal and fast. Fast processing uses a lower chart resolution, and is much quicker. Use this if you have a slower computer.
For a more details please see the technical guide.
Compatible with Metatrader 4 and Metatrader 5.