The Forex Trend | Foreign exchange indicator download-MT4/MT5 resources-MetaTrader 5 resources
This is how Forex trend trading works. This is a system where success depends on you accepting the discipline of when to exit a trend. I'm going to post an MT4 template as it's a bit tedious to set up. If you want to dive deeper into the theory and get a little ahead of the game, you'll be of great help to yourself by reading my MTF Stochastics and Escalator to Pip topics.
This system works because we follow 4 indicators that are designed to collectively show us short-term and long-term trends. The indicators are:
Heiken Ashi - makes the trend visible on the price chart Stochastic - lets us know where we are in the trend Standard Deviation - so we know when the trend changes (price movement)
Momentum - So we know when the current trend has ended - Momentum tells you what is happening in historical trends, it never predicts the future or trends just develop - very important to remember!
Here's how a typical long-threaded entry is triggered (see image below):
I like to look for safe and conservative entries from the top of the chart downwards. For early signals, you can work from the bottom of the chart upwards.
Starting from the top:
Note: The blue line on each indicator represents the short term and the red line represents the long term. The thick yellow line is the basic setting of the indicator, called the baseline.
Heiken Ashi - turns blue, which is a trigger that may form a long-term trend.
Stochastics - The yellow underlying stochastic line (BS line) crossed upwards through the 23.6 level. The key is that the blue line also crosses the 23.6 level, and they "comb" nicely in sequence. Notice that the red lines are starting to comb out as well. Also notice how beautifully and closely the blue and red lines relate to the BS line just before the trend begins.
Standard Deviation - This is the early or confirmation trigger. It usually starts a signal before the thread starts. The key is that the blue line crosses the yellow line (it doesn't matter whether it's up or down). We expect to see a nice comb like the one in this chart, but the blue line crossover is a signal of a trend change. Standard deviation measures volatility - used in this way to indicate changes in trend.
Momentum - an early sign of the demise of a previous trend. Momentum refers only to historical, prior trends. Never forget this! When we look at momentum, we are thinking about the past/previous events. The momentum indicator does the same thing as standard deviation for signals, and when the blue line crosses the yellow line, it's a good indication that the current trend has ended.
Yes, it's very easy! And the effect is very good.
This system works because we follow 4 indicators that are designed to collectively show us short-term and long-term trends. The indicators are:
Heiken Ashi - makes the trend visible on the price chart Stochastic - lets us know where we are in the trend Standard Deviation - so we know when the trend changes (price movement)
Momentum - So we know when the current trend has ended - Momentum tells you what is happening in historical trends, it never predicts the future or trends just develop - very important to remember!
Here's how a typical long-threaded entry is triggered (see image below):
I like to look for safe and conservative entries from the top of the chart downwards. For early signals, you can work from the bottom of the chart upwards.
Starting from the top:
Note: The blue line on each indicator represents the short term and the red line represents the long term. The thick yellow line is the basic setting of the indicator, called the baseline.
Heiken Ashi - turns blue, which is a trigger that may form a long-term trend.
Stochastics - The yellow underlying stochastic line (BS line) crossed upwards through the 23.6 level. The key is that the blue line also crosses the 23.6 level, and they "comb" nicely in sequence. Notice that the red lines are starting to comb out as well. Also notice how beautifully and closely the blue and red lines relate to the BS line just before the trend begins.
Standard Deviation - This is the early or confirmation trigger. It usually starts a signal before the thread starts. The key is that the blue line crosses the yellow line (it doesn't matter whether it's up or down). We expect to see a nice comb like the one in this chart, but the blue line crossover is a signal of a trend change. Standard deviation measures volatility - used in this way to indicate changes in trend.
Momentum - an early sign of the demise of a previous trend. Momentum refers only to historical, prior trends. Never forget this! When we look at momentum, we are thinking about the past/previous events. The momentum indicator does the same thing as standard deviation for signals, and when the blue line crosses the yellow line, it's a good indication that the current trend has ended.
Yes, it's very easy! And the effect is very good.
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