In the forex market, many traders want to join a trend before it is established and then ride that trend for a longer period of time.
While this strategy can be very profitable, as effective as it is, there are only a few indicators that can effectively indicate an emerging trend.
One of the most reliable indicators that help traders detect trends is the Trend Signal Indicator.
MT4’s Trend Signal Indicator helps Forex traders identify the latest trends at a glance.
The image below illustrates how to use the Trend Signal Indicator in MT4 charts.
The chart has green and red arrows.
The red arrows (pointing down) indicate that a downtrend is developing and the market is bearish.
Therefore, those green arrows (pointing up) indicate that an uptrend is developing and the market is positive.
Using this indicator, intraday traders are able to determine the best time when they should open and close their trading positions.
This indicator also allows traders to ride an uptrend in their positions to go long or take advantage of going long in a downtrend.
How to use the Trend Signal Indicator
This Trend Signal Indicator is a great indicator to use alone or in conjunction with other technical indicators.
This indicator is suitable for identifying breakouts, trends and trading within a range.
Trend traders can use this indicator to identify dynamic support and resistance areas.
They can help trend traders enter buy trades in an uptrend or sell trades in a downtrend.
In addition, breakout traders can use this indicator to identify support and resistance levels to retest after a breakout.
These levels will allow breakout traders to enter less risky buy or sell trades.
Stragglers can use this indicator to spot areas of reversal and place buy or sell trades.
Pointing the green color in the direction of this support point is a buy position.
A sell position is achieved by pointing the red towards the resistance zone.
Reversal patterns like bearish or bullish engulfing candles can be used to confirm buy and sell trades.
A long position can be closed when a red arrow appears at the top of the chart.
A short position can be closed when a green arrow appears on the chart.
MT4’s Trend Signal indicator is one of the most reliable indicators for identifying new trends at an early stage.
This indicator can be used in any market conditions (trend and range markets) and is applicable to all time frames.
The indicator can be used alone, but it is recommended to combine it with candlestick charts and price behavior analysis.