One of the basic charting techniques in technical analysis are trend channels. Trend channels work well with any timeframe or currency pair, and the advantage is that even beginners can easily learn to draw them and use them in trading.
The MT4 indicator that we introduce here will automatically draw such trend channels on your charts. Continue reading to find out more about it and to download it for free.
Example of displaying this indicator on the EURUSD daily chart
Look at the chart above. You can see that the trend channel is drawn just as a chartist would do manually. The midline of the trend channel is also drawn. When you switch the time frame, the trend channel that matches the time frame is automatically drawn, which is quite convenient.
Tips for using:
The trend channels drawn by this indicator can be used for various purposes - the same as a normal manually drawn channel.
For example, let's focus on the fact that prices tend to change within the trend channel. Therefore, if the price approaches the upper limit of the trend channel, you can expect a potential reversal and aim for a sell order.
On the other hand, if the price approaches the lower limit of the trend channel, you can consider placing a buy order (see the image below). In this case, combining with price action such as pin bar should increase the winning percentage.
Another feature is that prices are easy to return to the middle line of the trend channel. For this reason, it is possible to develop a strategy that sells at the upper limit of the trend channel and closes when it reaches the middle line.
Trend channels can also be used for breakout strategies. For example, if you break out of either end of the trend channel, you can place an order. However, be careful about fake breakouts (a phenomenon in which the price returns to the trend channel after a breakout).
- AllBars - Number of bars to count; Defines how many bars will be targeted by the indicator
Download the "AutoTrendChannel" indicator from the button below
Tip: Can’t open the downloaded archive file (ZIP or RAR)?
Do you need help with installing this indicator into MT4 for Windows or Mac OS? Our guide HERE will help you.