The main task is to determine the direction of the Trend Indicators. This is a lagging Trend Indicators species. And the flat yield many false signals. Here are some of the most common:
a) Moving Average (MA) Trend Indicators.
This is perhaps the most common Trend Indicators. There are four main types of moving averages:
Simple Moving Average (Simple Moving Average (SMA)
Exponential Moving Average Exponential Moving Average (EMA)
smoothed moving averages Smoothed Moving Average (SMMA)
linear-weighted averages Linear Weighted Moving Average (LWMA)
Most often, this indicator is used as follows: for a price increase above the Moving Average, make a purchase, but by lowering it below the indicator line - sell.
b) Bollinger Bands (Bollinger Bands) Trend Indicators.
The author of this creation is by John Bollinger. The indicator shows the speed and range of price changes.
Consists of three bands:
The average band - this is a moving average
The lower band - it's moving average minus 2 standard deviations
The upper band - moving average plus 2 standard deviations
In the settings you can change the display period and the number of standard deviations (the default is 20 and 2, respectively)
Prices tend to remain within the lower and upper boundaries of the strip. When the market is highly volatile, these bands widen when the volatility is low - narrowed.
This indicator has several characteristics:
When the much narrower band should expect a sharp change in the price.
When you exit price for the band should expect the continuation of this trend
If prices begin to move from the edge of one strip, then we must expect that they will reach the edge of another strip.
If, after the "cavities" and "peaks" occur in a strip "peaks" and "depression" within the band, likely to change the trend.
a) ADX - Average Directional Movement Index Trend Indicators - The index of the average orientation
This index shows how current diapason exceeds \ range behind yesterday and averages these readings.
Trading Trend Indicators signals are the focus of the index grows, the entrance to buy, if above + DI-DI. A sell signal when the + DI-DI below
Disadvantages: often false testimony when flat and a trend reversal. In addition, it is very late. But with the strong trends it works fine.
d) Parabolic SAR Trend Indicators
Also used to analyze the trend plots. The indicator is applied to the pricing schedule. In principle, within the meaning of it is comparable with the moving average, except that it is more "volatile", ie moves with higher acceleration and may change its position relative to the price. In a "coup" indicator will be the starting point of minimum and maximum price for the previous period. Signal the end of the trend (moving in flat or correction) or a trend reversal is a revolution indicator. With a well defined exit points. Short positions must be closed by raising prices above the Parabolic SAR Trend Indicators, and the long descent at prices below the technical indicator. In other words, the open positions should be held only in the direction of the Parabolic SAR Trend Indicators.
d) Standard Deviation-SD Trend Indicators
Measures the volatility of the market. Characterizes the size of price fluctuations relative to the average skolzaschego. If the value of this indicator is high, the market is volatile and prices are highly dispersed relative to the moving average, and conversely, if the value is small, the market malovalotilen, and the prices are close to the moving average. This indicator is often used.
We have described above trend indicators included in MetaTrader 4.
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