This automatic trendline channel indicator identifies the peaks and troughs of the market. It connects the swing areas of the automatically drawn trend lines.
This indicator is ideal for novice traders who rely on trend signals , but find it difficult to draw lines by hand. It is also a time saver for professional traders who analyse multiple charts on a daily basis.
In order to get the most value from the Automatic Trendline Channel indicator, traders need to have some basic price behaviour skills. These skills can help you understand how price reacts within the trendline area.
How the Auto Trendline Channel Indicator works in MT4
Generally, we connect the lows and highs of price in order to draw a trend arc. Depending on the price action pattern, it may be a trend line or several lines within the same chart.
But new traders usually do not see the hidden trend lines which are crucial, especially for intra-day traders. The indicator is able to scan the market for all areas of movement. It then connects them with straight lines and finally forms several trend lines. Trend lines are created using solid and dashed lines.
It shows the way the price behaves towards the trend line areas. The dashed lines represent the lower trendlines. These lines are drawn based on short-term reversals in price.
However, the thick lines indicate the major trend lines. Major trend lines play a vital role for day traders when it comes to finding daily trend following trade setups.
In addition, multiple trend lines can create automatic price channels. When price rebounds upwards from trendline support in a price channel, we are looking for buy setups. On the other hand, when price breaks through the resistance of a trendline and starts to slide downwards, we should consider a selling opportunity. Its direction on the channel indicates the bearish or bullish nature of the current trend.
Its automatic trendline channel indicator offers greater precision in defining the correct trendline. In addition to moving averages, the Auto Trendline plays an important role in determining the dynamic levels of resistance and support. It helps to save time and gives more assistance in identifying trends.