Welcome to another best forex indicator article! In forex, one of the hallmarks of technical analysis is trendlines. It makes sense to study trend lines since technical analysis is built on the fact that the prices of currencies trend. If you already know about trend lines and its usefulness, but want to understand how to use the Trendline Indicator MT4 effectively, then you are in the right place.
For the unfamiliar, before we go too far, let’s quickly define what the Trendline Indicator is about and who should use the Indicator. Also check our best metatrader indicators page for some trusted premium indicators.
What Is a Trendline Indicator?
The Trendline Indicator is a custom technical indicator that helps forex traders to spot trend lines accurately and also plot the lines on their trading charts. Whether you’re a scalper or a short-term trader that rely so much on trend lines, this Indicator will make your job easier.
Before the introduction of the Trendline Indicator, forex traders were usually drawing lines manually. This made the job of forex trading laborious for all categories of traders. If the interaction between the trend line and the price is no longer expected, the line would be removed from the trading chart. Plus, it doesn’t redraw and the optimal timeframes to make the most of this Indicator are M15-H1.
Who Should Use The Trendline Indicator MT4?
The Trendline Indicator is perfect for intraday traders. If you are a novice, you will also find the Trendline Indicator useful. Besides, mid-term traders can use this Indicator to plot trendlines to determine the exact time to open a trade position.
Drawing Trend Lines Technique
Below is how the Trendline Indicator draws trendlines:
1. The Indicator locates every possible trend line on the chart.
2. The Indicator uses a few rough filters to exclude more than half of the trend lines.
3. The Trendline Indicator then check to confirm the quality of the remaining trend lines.
4. The Indicator then displays the two best trend lines on the chart.
The two trend lines displayed on the chart are:
1. Uptrend line (blue color)
2. Downtrend line (orange color)
How To Trade With The Trendlines Indicator
The trading techniques for the Trendline Indicator are grouped into two:
1. Trend line breakout
2. Price bounce from the trend line
Price bounce from TL:
The price bounce technique implies placing a buy order when the price touches the uptrend line and selling when the price touches the downtrend line. Below is how to place the stop loss and take profit:
1. Stop loss: Place the stop loss under the previous low.
2. Take profit: Place your take profit at the same level as the highest price within the range of the trend line.
In this technique, all the trend lines will break. But, you can still position yourself to make a profit. The following are the market conditions to keep in mind when using this trading strategy:
1. Consider placing a buy order if the downtrend line is broken and the price of the currency pair settles above the line. You can also place a buy order if the price touches the line from the other side.
2. Consider placing a sell order if the uptrend line is broken and the price settles below the line. Also, you can sell if the price touches the line from the other side.
3. The logic behind placing a stop loss is the same for both the buy and sell order. For the stop loss, you can place it below the lowest price level.
4. Place the take profit at the same level as the highest price.
The Indicator Settings:
The successful algorithm has made it easy to spot trend lines accurately. Below is how to adjust the Trendline Indicator settings:
1. Long: 1200 candles
2. Mid: 600 candles
3. Short: 300 candles
The trend line color is dependent on the background color of your trading chart. Also, the projected length in this Indicator is the predicted trend line length in bars.
How To Install
The Trendline Indicator installation process is simple. Follow the instructions below to install this Indicator to your MetaTrade4 chart:
1. Download the Indicator from a reputable source
2. Save the file in a separate folder you will easily remember.
3. Start or restart your MT4 trading terminal.
4. Choose a trading chart you wish to install the Trendline Indicator.
5. Navigate to the Indicator Directory folder
6. Copy-paste the Trendline Indicator into the Indicator Directory folder
7. Right-click on the new Indicator and click on “install.”
8. Check all the imports boxes and click OK.
9. The Trendline Indicator should now appear on your trading terminal.
10. Adjust the indicator settings to suit your trading preferences.
11. If you are stuck at any point, you can reach out to us via the comment section.
How To Remove Trendline Indicator
If you are done using the Trendline Indicator, and you want to deactivate it from the trading chart, below is how to do it:
1. Start your MetaTrade4
2. Select the chart where you installed the Indicator
3. Head over to the Indicator Directory folder
4. Look for the Trendline Indicator MT4
5. Right-click on the Trendline Indicator file and click on “delete/remove.”
6. The Indicator should disappear from the indicator list.
Final Thoughts on Trendline Indicator MT4
Okay, that’s it. The Trendline Indicator MT4 is a great indicator you need to incorporate in your trading arsenal to spot trend lines. As soon as this indicator spots trend lines, it plots them in your trading chart. With the information on your trading terminal, you can predict the market direction and know the right time to open a trade position without losing money.
Do not use the Trendline Indicator in isolation because this won’t give you the best results. Always combine it with other technical indicators like Resistance and Support indicator, MACD indicator, and Gap Indicator MT4. Thankfully, we have all these indicators listed here on our website for you to consider. Using a combined indicator will not only improve your earning potential, but your trading skills will also be positively affected.
Lastly, never attempt using an indicator the first time in a live account. You could lose all your trading capital. At best, practice with a demo account to fully understand the workings of the Indicator and how to make money with it. The Trendline Indicator is simple and straightforward to use. You can configure or adjust the indicator settings to suit your trading preferences at any time.
Is the Indicator worth your time or a sham? Please share your experience with us after installing and using it!