I was able to add another grey line on the left as a support level of a trading range was more obvious. While I would not use a line chart for entries or exits, it does give you a good indication of the trend direction including sideways markets. Swing trading and day trading can both take advantage of the clean look to the line chart for your trend determination. I want to include trend lines along with price action. While trend lines are not a trend indicator in the complete sense, they can be important if you are looking for a more visual method.

I kept it simple and used the extreme low for the first line, the range in the middle is obvious, and lines for the remaining trends. The dashed line shows where the first trend is in jeopardy as price broke the trend line and then retested the backside. The second solid line would have been adjusted to include the price spike in the middle of the downtrend.

The secret is to ensure you have trend line drawing rules that you do not deviate from. The most common method people use for a trend indicator is a moving average.

Whether you use something like the Hull moving average or the more common simple and exponential averages, they are a fast way to determine your trend. There is no magic in a moving average as it simply calculates, with different formulas, the average price over a set number of periods.

Not only can you choose your style of moving average, you also choose your look back period. Medium term direction — 50 period average. A shorter term average is going to flip from long to short more often than a longer term moving average.

This is why you must be clear on the type of trader you are. You can see that when you use a moving average, not only does your charting time period matter, but so does the look back period. Using the 20 simple moving average will have you looking to short while the SMA is still looking long.

You would still need to have a buy signal or sell signal line up according to your trading plan. Using 2 averages, such as the 20 and 50 period, can help you gauge the strength of the trend , When the 20 pulls away from the 50, price is advancing at a steady rate and you can consider that to be a strong trend.

When the 2 moving averages are wrapped around each other, you have a trading range. Also consider how far price pulls away from the 20 period average. The further price gets from an average price, the more risk there is of a mean reversion pullback in price. You can choose to keep it very simple: is the moving average heading, generally, in one direction over another? I have written about the MACD in the past and I think it is something to consider especially if you use it on a higher time frame.

In our example, we will use the default setting of 12, 26, 9 and will remove the histogram. I will also use the daily chart for setups but the weekly chart of trend direction. Once the MACD crosses to the upside the green circle on the weekly, the trend indicator is showing the current trend as long and we are looking for buy signals on the daily chart.

You will see the downside cross on the daily chart fast line down through the slow line where we see a pullback. We look to get long according to our trading strategy. On the daily chart, we can use the MACD to show consolidation as the lines of the indicator get tight.

That said, as long as we are seeing the separation of the lines of the MACD on the weekly, we consider we are seeing a strong trending market to the upside. The DMI is not only a decent trend indicator but with the addition of the ADX , we can also see the strength of the current trend. I picked a daily stock chart for this example that also takes into account an ascending triangle chart pattern. How do you read this trend indicator? If you waited for the ADX trend strength indicator to pass 20, you find yourself looking for entries at highs.

Understanding price patterns along with reading the DMI and rising ADX, gets you positioned long on a break of the triangle. You can see on the left that the DMI lines are crisscrossing while the ADX is below One look at price shows that the indicator is telling you we are in a trading range. Whatever method you use, ensure it is part of an overall trading strategy that includes risk management. Yes, all are good indicators.

The more different timeframes that support one direction the better. Comment for Coach Shane. My trading platform is Think or Swim by TD Ameritrade. Is there any any way to implement putting outside smoothed Hiken Ashi data into Think or Swim?

I think TOS may be proprietary. Thanks , Rick. This site uses Akismet to reduce spam. Learn how your comment data is processed. August 19, Posted by: CoachShane Category: Trading Article 3 Comments. Why Should You Use Trend Trading Traders looking for bigger returns know that the path of least resistance is in the direction of the big money. Is there a benefit to grabbing a trend reversal? The Best Forex Trend Indicator was able to determine a trend line, which is shown by the solid line.

The dotted line indicates the projected direction of trend continuance as well as the region of probable price-trend line interactions.

As you can see in the diagram above, the indicator accurately distinguishes between actual and false breakouts. This is due to the fact that the asset price tends to keep moving in the same direction as the trend, but a reversal is less likely.

The idea behind sell trading is the polar opposite of buy deals. All trend lines will eventually break. Traders, on the other hand, do not overlook the possibility to earn even in this situation. That is why a technique for trading when the trend line breaks out exists. Both techniques use the same rationale when placing Stop Loss orders. Trend lines are reliably detected thanks to a successful algorithm.

As a result, just one option has been added:. We highly recommend trying this trading system for at least a week with ICMarket demo account. Also, familiarize yourself with and understand how this system works before using it on a live account. Get Free Access. Do not change these fields following. April 28, Posted by: Forex Wiki Team Category: Free Forex Indicators No Comments. Best Forex Trend Indicator Review Contents. This Content Is Only To Registered Users Please Login To Unlock The Content!

Lost your password? Please rate this Article. Best Forex Trend Indicator V1. Facebook Twitter Pinterest LinkedIn Digg Tumblr Email Reddit Buffer Flipboard Telegram. best confirmation indicator forex best forex indicator in the world best forex trend indicator forex direction indicator forex trend indicators.

Last Updated: September 1, By Rayner Teo. The Daily chart is in an uptrend. Price action refers to reading market structure, momentum, and sentiment to identify trading opportunities. If you want to learn more, go read The Price Action Trading Strategy Guide. Candlestick charts can get messy if the wicks are long which makes it difficult to identify the trend especially for new traders.

It shows the price on your chart by taking the price at the close and then connects the closing prices together via a line. You must know that line chart only considers the closing price.

In my opinion, a line chart is useful to identify the direction of the trend. Besides using the MA as a forex trend indicator, you can also use shorter-term moving averages to identify the strength of a trend. A Trendline is a tool you draw on your charts. It can help you identify the direction and the strength of a trend. If you want to determine the strength of a trend, then pay attention to the angle of the trendline. But if you want to discover my trendline trading strategy using proven techniques that work, then check out this video here….

The channel helps you identify where opposing pressure could come in. This means you can take profit ahead of time — before the price has a high probability of reversal. A mistake made by many traders is they become so involved in trying to catch the minor market swings that they miss the major price moves. If the price is above it, the market is likely to be in a long-term uptrend and I want to have a long bias.

If the price is below it, the market is possibly in a long-term downtrend and I want to have a short bias. In such a scenario, the pullback may never come as the price keeps breaking higher. Thus, in strong trending markets, the best entry is usually breakout trades.

Possibly towards the 50MA or, previous Resistance turned Support in an uptrend. In such a scenario, you can trade from the MA or an area of Support in an uptrend.

If you want to learn more about forex trend indicators, go read The Trend Trading Strategy Guide. There are no best settings out there because it depends on the type of trend that the market is in. The Moving Average Trading Strategy Guide. Thank you and keep it coming.

Regards Haydn Jones. What about the MA. On wich time frame. If you use daily chart the MA is above and when you use 5 minute is below? Rayner uses only the MA to define the long-term trend. You can use 20 or 50 MA for that timeframe too! Thanks for explaining and showing us what is your strategy. I have started to employ a trading plan and with the EMA20, EMA50, EMA with my preferred timeframe, I felt that I am more in control in my trading with risk:reward ratio. Thanks for all the education.

Hello Rather, Thank you for your explanatio, now a have a better understanding of Price Action. Hi Rayner, Thanks for revision. I learn and understand good method from you, which help me a lot during trading. Great work…. Hi Rayner, Thank you very much for your time and explaining!

I think that it is much better for me to identify now. It is wonderful and helpful! Excellent post Rayner! Thanks for sharing. I try not to use too many indicators in my trading mostly focused on price action.

But this list of ideas definitely helps confirm those trading signals that are worth paying attention to. Thanks again! I rely on market structure to tell me that. For example, if the price breaks out of a long-term range… the market could be moving into a trending stage. Thanks Rayner for your educational posts. You made life simple. You are a blessing. Now I understand trend identification better than before using a combination of techniques explained here.

Thanks Rayner. My demo trading is getting on pace so does the education level as I could perceive these easily and polish up my mindset and boost my confidence. Wish to take a moment to say a big THANK YOU not to mention you all the extra guidance through long-winded personal emails.

Great is your reward to help people in the disorganised trading world. May God bless your family! Hi Rayner , thank you very much. It is very helpful for me. Everything is solved in shorter time frames as for me. I am trying to follow the trend on shorter time frames through using the 20 MA. When I decide about my entry and exit I realize the support and resistance areas. I want to learn to go with a trend till it ends. Thanks for great supporting us with giving more knowledge.

As a new comer and loser this is very useful and it encourage us. Appropriate if you can train me from A as self learner I do not know where I should start.. Hello Rayner can u elaborate more on the transition of the market from range to trend identification using markert again the point of using line graph for trend identification is not well seeping into ma mind with good interpretation can u elaborate it more, thanks in advance.

Dear Rayner, is it better to just use the 20, 50 MA on the hourly because the MA is to large to use on the hourly? Thank you for the good article. In your definition of price above MA, it will be good to differentiate between the ones that are in a trend versus one that are ranging while still being above MA.

Great article. What about stocks that has gaps? For a day trader, how do you handle when one timeframe is in uptrend say daily and another in downtrend say 60 mins. Clear and easily understanding. I will look forward to your further great content. Thanks a lot. thanks rayner for the posts they are very educative i realise everydae that there is still more to learn. may God bless you. Hey Rayner, This information was very much helpful. Keep up good work bro. And yes, can you try to write or make a video on RSI, MACD or any other which you find useful that would really help.

I would trigger my entry from the value zones in the 4H chart? Is it acceptable to optimize the price move in 1H charts to trigger the entry? As a beginner, this is great stuff! Just a quick one, do u sell signals? Or better still, do u mentor beginners to make daily profits? Pls advice. Strong Trend: 50 Degrees to 80 Degrees Trend-Line Angle Healthy Trend: 30 Degrees to 49 Degrees Trend-Line Angle Weak Trend: 10 Degrees to 29 Degrees Trend-Line Angle.

The limitation of this is that the angles are skewed on lower timeframes and scale of chart, so some may have different results 🙂.

Hi Raynor, Great information! I typically use 2 time-frames to get a better perspective of the market. But, I am interested in using EMA but I am not sure if I should place it on the weekly chart or the daily chart. I think the time-frame difference will cause in-accurate trend if I place on weekly and do entries on daily. Should I use smaller numbers on the EMA and if so, what do you think would be good numbers?

Your thoughts? You said zoom out an see the whole picture but then you said to stick to 1 chart. I read that we need to keep track with multiples chart instead of focusing on one.

However, you cannot rely on a single technical indicator to achieve effective trading. But this list of ideas definitely helps confirm those trading signals that are worth paying attention to. Sign Up. The final trend indicator that will actually work for you is Channels. I would trigger my entry from the value zones in the 4H chart? This is why you need to know and understand the timeframe you are using before you start trying to identify any trend directions.

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