Trendline Indicator MT4
Trendline Indicator is the best dynamic trendline indicator for MT4 platforms. Helps in filtering potential price action patterns of forex instruments.
The Trendline represents an auto trend line indicator for the MT4 platform. It doesn’t draw straight trend lines. Instead, it uses Least Square Moving Average (LSMA) for finding dynamic trend lines of the price. Finding the correct market trend is the basic task of the Trendline indicator. Besides, it shows real-time dynamic support and resistance of the market. As a result, you can use it to identify potential pending entry levels within the right trend direction.
Moreover, the Trendline indicator helps in filtering price action patterns and assessing the success probability of the trade setup. For example, a price breakout or a bullish pin bar within the current trend direction carries a higher potential of making profits than going against the trend.
Furthermore, the Trendline indicator can be used to improve the performance of your Expert Advisor (EA). You may command your EA when to activate an entry once the price finds true support/resistance at the trendline area.
The Trendline is a non-repaint MA-based indicator and doesn’t support drawinfg a fractal-based trend line. Besides, forex instruments, this indicator is also perfect for Stock, Futures, and Cryptocurrency chart analysis.
How to trade within the trend using the Trendline MT4 indicator?
This indicator uses two lines for plotting the dynamic trendline. It changes its colour between blue and red to show the changes in the market trend directions. The indicator is blue when the trend is bullish and turns red when the trend switches to a bearish mode.
As a trader, you’re required to determine the current trend status first. Next, wait for price action signals near the trendline level that supports the current trend direction. Alternatively, you may place an MT4 alert near the trendline area so that you get notified whenever the price comes closer to the trendline area.
In this above example, the price broke the trend line support at the top of the chart. Later the trend line turned into a red color confirming the bearish trend of the market. Also, the price failed to regain its position above the trend line support. According to the trendline trading strategy, it is an ideal setup for a sell entry.
Moreover, you may use other candlestick or chart patterns such as false break, price breakout, triangle pattern for determining the trend-following market entries. There are two rules you need to keep in mind while trading with the Trendline indicator:
The price action signal must be plotted near the current trend line level
The price action signal and the market trend must follow the same direction
For example, the price makes a false break at the dynamic support and moves above the trendline level. Now, if the indicator is blue confirming a bullish trend then it might be ideal for opening a buy order. On the other hand, it might not be wise to go short following a bearish price breakout while the market trend is bullish.
Conclusion
The Trendline is a useful MT4 indicator for analyzing the market trend and the support/resistance of the price. It works best when applied on a forex currency chart but also perfect for trading stock, futures, and other online trading assets.
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