Trend line indicator
Trend lines are the basis of most strategies used in financial markets; if desired, they can be built manually using the capabilities of the trader’s terminal, but a simpler solution is to use the “Trend Line” indicator.
This tool will quickly draw support and resistance lines on the chart of a currency pair based on a given time period.
This will allow you to implement a trading strategy in a price channel without wasting time on manually drawing channel boundaries.
Another advantage is that the trend line indicator automatically rebuilds the lines simultaneously with the movement of the currency pair chart, which is not possible with manual construction.
Your task is only to install the indicator and enter the initial data or use the default settings.
They are the boundaries of the price channel, the width of which depends entirely on the settings you enter.
You can find a description of all the necessary settings for the correct operation of this script in the archive along with the program itself.
The script for constructing a price channel works on the basis of the well-known and quite popular ZigZag indicator , so some of the entered settings regulate its operation.
What does the use of the trend line indicator give:
1. Helps determine the direction of trend movement on the selected time frame; after setting the cut, you can see in which direction the support and resistance lines are directed. If it is up, then the market is dominated by an upward trend; if it is down, then a downward trend is observed.
2. Construct trend lines based on the points of minimums and maximums that are most significant in a given time period.
3. Determine the levels for setting pending orders.
4. Identify possible places for price reversals and find the most suitable points to enter the market.
Strategies based on the trend line indicator
1. Breakout - based on the drawn lines, we determine the places where there is a possibility of a price breakdown, and place two pending orders in different directions. To protect against false breakouts, do not forget to immediately set the stop loss value.
2. Reversal – if the price channel is wide enough, you can use a reversal strategy; in this case, a position is opened immediately after the price has pushed off one of the lines and moved towards the main trend.
If you use the script on short time frames, it can serve as a basis for trading using the scalping strategy; trades are opened taking into account the price movement in the price channel in both directions, after a reversal at one of the lines.
The trend line indicator can also be used in any of the Forex trend strategies to search for entry points into the market, based on the received data on price movement in the price channel
Download trend line indicator.
If you want to use the strategy of the same name, it is presented on the page http://time-forex.com/strategy/trend-lines