All traders should know the trend before making their decision before placing the buy or sell orders. You really do not want to trade against the trend, never do that. Furthermore, your objective as a good trader is to trade with floating profit and to avoid drawdown as much as you can.
The first step always starts with #supply-and-demand, rising and falling #channels, #trend-line, #engulfing etc.
All the above contribute to what is called “Price Action” and that is the best and most reliable way in trading and catching the trend and making profits, without stress.
You can either scalp or trade using EA, whatever the tool is, that’s how all traders should consider. However, it can be tricky for your eyes to catch the trend as there are a number of candlesticks and in different time frames. Now, this is made easy using the #trend-line-indicator.
The Investment Castle Trend Line Indicator will automatically draw the trend lines on the MT5 or MT4 for you. And, you can trade on a chart using a time frame that is different from the time frame of the trend line itself.
This is a straight example I picked up randomly from Market Watch today and as we can see a straight application to the Price Action and basic Forex trading rules.
I loaded the following indicators on this chart:
This indicator will show some guidance messages such as “Buy only”, “Sell only” “Possible breakout”. These messages are for guidance only and you must exercise how to use this indicator.
Auto update channels: if set to true, the indicator will frequently update the trend lines and you will not see the bottom left button on the chart. I don’t prefer this method as I will not be able to see the price in action with respect to the trend lines.
Indicator period: is an input for the calculations of the trend lines. The lower the value, the more frequent the trend line gets shifted. We should balance this out with the Min. Candles to draw lines input.
Multi time frame settings: you can choose 1 time frame or up to 4 time frames on the same chart. If you will use 1 time frame, ensure that all 4 time frames are set to that same time frame.
Below, I show the best settings I use with H1 time frame. I found these settings as the logical reprsentation of the trend lines for different pairs.
The indicator is available exclusively at the MQL5 Market from the links below:
I am happy to find out, that you have come to the same combination of indicators, which I did myself too, after testing and creating about 100 different strategies for EAS and testing them.
No I use channels and supply demand zones as well as engulfing candles. Interesting add on is your trend indicator. The only thing, which I can’t quite understand from the first glance is a buy only trendline on a downtrend in a falling channel. Could you share your strategy and explain the entry and exit points, you are using?
I ignore the Buy signal from the trend line indicator when the market is in downtrend. Although that Buy signal is correct in many cases when the market is in downtrend as part of the market structure, but it is safer just to keep on selling at HH.
I use the same combination yes. On D1 and H1 time frames for the three of them.
Can you also share your targets and stops setting? I normally target the opposite support/resistance level, but place my trailing stop after reaching 1.5 reward to risk level.
By the way, I’ve notice that for SP500 futures 15 mins channel shows good swing directions as well as early entries on engulfing candles.
Did I get you right, that your entry is an engulfing candle off support/resistance or a trendline or a combination of all three?
That’s right, it is the combination I use.
My TP is the next support/resistance on H1 or D1. My SL is above the opposite.
Just one last question: Buy only and Sell only text near trendlines means you should avoid the opposite near that line, right? Would be good to have one instruction on a chart, rather than both, I think.
Say, you have a falling channel, a resistance level, a trendline and text - Sell only. This would help to avoid turning positions on a fake breakout, which sometimes happens to me, if I try to catch the market))
If you can send me that as a few screenshot examples from the charts, I can add a condition to limit the instructions.
one more question: what trend do you choose if daily and 1h show different direction?
You will need to see the support and resistance then.
Do you have an EA based on channels and trendline indicator? I’d rather subscribe to yours, than try to order it on freelance
Thanks, Ahmed. Will try it. What about trendlines? Any plans for an EA based on trends?
I’m working on EA based on trend lines indicator but it is a bit tricky when the price breaks out and I feel it difficult to continue with this EA or it needs a bit more forward testing.
Can you share your strategy with this indicator? I would be happy to discuss and test it, giving some feedback