Auto TrendLine Indicator
Trend lines are one of the key tools of classical technical analysis and used by nearly all traders. This is because they can be easily drawn and prove to be very efficient. However, the lines often cause some misunderstandings among traders due to the following factors: frequent redrawing of trend lines, false or true breakouts, and too many trend lines that can be drawn using extremes.
Therefore, drawing a valid trend line can be problematic both for experienced and newbie traders. The Auto TrendLine indicator will help you tackle this issue.
Description Auto TrendLine Indicator
AutoTrendLine is an indicator that displays the most valid trend lines on the chart. It will automatically plot only those trend lines that the price is most likely going to interact with. A mathematical function and several filters, which allow displaying the most significant lines on the chart, lie behind the indicator.
The indicator promptly responds to the market situation. If the price makes new extremes, the trend line changes the angle of its slope; if the trend turns into the opposite one or even a flat, the old and no longer valid trend line will be removed.
In the real world, the indicator is made up of two lines:
- red line – support line
- blue line – resistance line
At first site, using two trend lines at once can be confusing for a trader. However, in practice, this will enable you to “read” the chart even better.
If you compare the length of the current downtrend line and that of the current uptrend line, the fact that length and strength of the former is greater becomes very obvious. The red line in the picture only indicates that there is a small retracement in the market.
Why Do Trend Lines Matter?
Price of an asset traded in the Forex market is based on a large number of factors, some of which cannot always be interpreted. One example is the price behavior during news release.
When it happens, the price movement volatility increases, and the trend line can be broken out. These situations are quite common, and it can be hard enough to interpret them.
The given indicator takes into account almost all price movements and adjusts trend lines in case of true breakouts and trend changes only – therefore, it makes it much easier to analyze charts for traders.
As a result, the AutoTrendLines combines simplicity and maximum efficiency. Using this product can help both professional and beginning traders to understand the market situation.
How Can I Trade With the Auto TrendLine Indicator?
It is traditionally considered that trading with the trend is one of the most profitable and safe strategies, since the absolute majority of traders open their positions in one direction in such situations. Using this trend lines indicator will allow you to fully and comprehensively analyze the chart and spot the exact entry points.
As shown in the example above, the price growth next to the uptrend line has slowed, and an additional signal lines has finally confirmed the interest in selling. When making a trade, Stop Loss should be set beyond the trend line, and trade should be closed by a pending order or during the trend change.
So, we’ve reviewed the trend lines indicator named AutoTrendLines in this article. Surely, this product, like all other ones, is recommendatory in nature and acts solely as an addition to your trading system. Because you need to remember that you cannot rely entirely on any indicator.
However, using the Auto TrendLine indicator can make it much easier for you to spot really important trend lines. Besides, a combination of filters and settings will allow all traders to use the indicator with ease.
