AUTOTRENDLINE INDICATOR

• The first best indicator of automatic trendline construction. Advanced choice for your MT4 terminal.

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

• AutoTrendLineis 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the trend line changes the angle of its slope; if the trend turns into the opposite one or even a flat, the old and no longer valid trend line will be removed.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, each of which is divided into the current trend line (solid) and the projected trend line (dotted):

– blue solid line – uptrend;
– blue dotted line – projected uptrend line;
– red solid line – downtrend;
– red dotted line – projected downtrend 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 uptrend line and that of the current downtrend line, the fact that length and strength of the former is greater becomes very obvious. The red solid line shown 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.
• It is also believed that the more signals indicate that you should open a trade, the more reliable the signal will be.

As shown in the example above, the price growth next to the downtrend line has slowed, and an additional signal as the transient level (traders have used the level to buy before, but now they’re selling from it) 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 (Take Profit) or during the trend change.

• This indicator helped to spot a reliable entry point with the risk-to-profit ratio of 1:3.

As for this reverse situation, where there is an uptrend, the trend lines indicator has also played a key role in analyzing the chart.

• First, we would like to note in practice that was mentioned in the theory above – the indicator hasn’t redrawn the downtrend line when it seemed to be a false breakout. Without using the AutoTrendLines indicator, traders would most likely have adjusted their chart analysis and thereby greatly distorted their market vision and, consequently, trading decisions.
• Second, as in the example of selling, using the trend line and the transient level provides a good Buy entry point. The Stop Loss shall be set beyond the trend line, and trade should be closed either by a pending order (Take Profit) or a signal that there is the trend change (in this case, the Double Top pattern acts as the signal).

As in the example with selling, if you make a buy in this situation, the risk-to-profit ratio will be 1: 3.

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.