Trend indicators
The main task of technical analysis is to trend detection. The very notion of a "trend" as a directional price movement is a key definition in the market. Support and resistance levels, moving averages, price patterns, technical analysis figures, etc., all these tools are used for one over-objective: to determine the trend in order to enter the market accurately. Most of the most successful trading tactics are based on the postulate: "Trade with the trend and you'll win.
For beginners in the market, I would like to suggest two indicators that serve as good advisors in determining the trend - these are indicators: Trend_alexcud и FanSimple. Both indicators are quite often used by experienced traders in various trading tactics for additional advice in establishing a trend. In the construction of the indicated indicators is the method of moving averages, the most popular method of market analysis on the market.
The basic principle of this method - A sell signal is registered when the price chart falls below its moving average chart, and vice versa, a buy signal is determined when the price chart rises above the moving average chart. Indicators analyze the market at once in several timeframes, which is very convenient, and in case of using some trading platforms allows the trader to save traffic, excluding frequent reloads of the platform's working window.
Trend_alexcud multitemporal indicator shows the trend direction and gives the command to open a position for three periods at once in one window. This indicator characterizes the trend quantitatively as a percentage, and on the right, at the bottom, recommendations are given for opening a position. The main advantage of this indicator is that the trader can assess the situation and know the direction trend in seconds, which is very important in the fast-moving market. The main disadvantage is the lag of the signal in the short periods (that's why the indicator is used as auxiliary).
FanSimple indicatorIt is a little more complicated, but also more accurate, it shows the correctness of the reversal of the fan of averages at once on six timeframes. The indicator includes three (in some variants four) moving averages with values 5, 21, 55 (sometimes 233), which are reflected on the chart. In the upper right corner of the chart are six icons in the form of blue arrows up, red down or gray rhombics, respectively for the six timeframes: M1, M5, M15, H1, H4, D1.
The blue up arrow indicates that the Averages fan is correctly expanded upwards on this timeframe, the red down arrow indicates that the fan is correctly expanded downwards, the gray diamond indicates that the Averages fan is not correctly expanded on this timeframe. The green circle above or below the arrows and diamonds shows where the price is - above or below the fan. The colors of the pointers can be changed.
The rules of the fan are as follows:
1. The correct fan shows strong trendThe average is in ascending order: 5, 21, 55 (233). This is when there is a strong movement of currency pairs, defined as a trend.
2. The wrong fan will only give Flat. For example, 5 has crossed 21 up, and 55 is still above them, or 1 hour on the chart is trending up, and 5 minutes down. Flat is also defined when the M5-M15 does not coincide with the H1-H4.
Conclusions on the work of the indicator:
1. any trend starts with flytrapThe trader must catch the moment in which the moving averages are placed in exactly the right order: 5th, 21st, 55th ( 233rd ). This will be the trend.
2. As long as the correct fan is not formed on the chart, this currency pair will be flat.
Set both indicators on any currency pair and dial in statistics for that pair in the demo account and you will appreciate their simplicity and reliability in determining the trend.