Sign In with Google
Sign In with Facebook
The Trend Detection Index of Averages is a small trading system based on the use of moving averages, the calculations of which are aimed at determining the current trend, namely its direction and strength in the market. Information about the trend that the indicator determines allows for finding the moment of opening a trade. It is presented in the lower window of the price chart as two intersecting colored lines with an additional color filling, which, under certain market conditions, change their color, direction and general direction relative to the signal level. The current values of the indicator are used to determine the trend and trade during this period.
The Trend Detection Index of Averages indicator is suitable for trading on any timeframe using any currency pairs.
Input parameters
There are several sections in the settings of the Trend Detection Index of Averages indicator, each of which is responsible for its general functioning. The Input parameters section is responsible for setting its technical operation, while the Colors section is responsible for its visualization, and the Levels section is for adding to the window indicator of signal levels.
-Period - indicator calculation period. The default value is 15.
-Pre-smoothing period - period of preliminary smoothing of indicator calculations. The default value is 5.
-Pre-smoothing method - a type of smoothing applied to indicator calculations. The default value is Linear weighted
-Price - a type of the price to which the indicator calculations are applied. By default, it has the Close price value.
Indicator signals
The Trend Detection Index of Averages indicator is very easy to use. To open a certain trade using the indicator, it is first needed to determine the direction of the current trend. To do this, in turn, it should be taken into account the current values of the indicator, namely the color and direction of its lines and filling relative to the signal level and each other. If the current trend in the market is upward, long positions are opened, if the trend is downward, short positions are opened. When the current trend changes, in both cases, trades are closed.
Signal for Buy trades:
- The line of the color indicator with the growth value is above the line with the fall color and above the signal level. The filling between them has a color with the growth value.
Upon receipt of such conditions characterizing an uptrend, a buy trade can be opened. If the current trend changes, namely at the moment of receiving reverse conditions from the indicator, the current trade should be closed and opening new ones should be considered.
Signal for Sell trades:
- The lines of the indicator intersect so that the line with the fall value is above the line with the rise value, while below level 0. The filling between the lines has a color with the fall value.
A sell trade, due to the presence of a downtrend, can be opened immediately upon receipt of a combination of such conditions on a signal candle. At the moment of receiving reverse conditions from the indicator, that is, when the current trend changes, the trade should be closed. In this case, it should be considered opening new trades.
Conclusion
The Trend Detection Index of Averages indicator is a very effective trading algorithm since its calculations are based on the use of an indicator whose accuracy has been time-tested. At the same time, the indicator is also easy to use due to its convenient visualization. Practice on a demo account is recommended before trading on a real deposit.
