TMA Line Indicator
The TMA line indicator draw bands to tell the direction of an overall trend.
Description
The TMA line indicator is a simple MT4 indicator that plots two bands on the chart. The TMA is an acronym for triangular moving averages.
The indicator looks identical to Bollinger Bands having one central line and two bands. The upper and lower bands act as support and resistance levels. These levels help in identifying key entry and exit points.
TMA draws up moving averages on the chart using volume and price. The central line of the TMA indicator act as a trend detector. The line comprises three colors; red, green, and yellow.
When there is a downtrend, the TMA indicator shows red color. When the trend is upwards, the indicator plots a green color.
The yellow color suggests market neutrality. It means that neither bulls nor bears are winning.
The core concept behind the TMA line indicator is to smooth the price data, so the indicator can illustrate upper/lower bands and a central line.
How to trade the TMA line indicator?
The TMA line indicator is great for finding the overall trend’s direction. The central line act as an entry and exit signal.
When the indicator plots a green central line, it’s a signal for entering long positions. On the flip side, when the indicator draws the red central line, it suggests the bears are taking over, and you should enter short positions.
The yellow line is when you should refrain from entering positions. The yellow line represents neutrality, and it’s best not to enter the market.
The TMA’s default period can be adjusted according to the strategy. For instance, when applying short-term strategies, you can set the indicator on a lower period, like 10.
Let’s find out the buy and sell strategy for the indicator:
TMA line indicator buy strategy
- The central line of the indicator should be green.
- Wait for the green line to fully develop before entering.
- Enter the trade at the green line.
- Place a stop-loss near the recent low of the buying point.
- Exit the trade when the central line changes its color.
TMA line indicator sell strategy
- The central line of the indicator should be red.
- Wait for the red line to fully develop before entering.
- Enter the trade at the red line.
- Place a stop-loss near the recent high of the selling point.
- Exit the trade when the central line changes its color.
Conclusion
The TMA line indicator works best on every timeframe, and you can adjust its period according to your strategy. For further signal confirmation, you can combine the indicator with others like the RSI or MACD.