Trend Quality Indicator
Excellent trend detector. Free download. A perfect indicator for showing when the market is trending and when there is “noise” in the market.
Description
You have probably heard that the trend is your friend. However, the market does follow a smooth established trend. We know the market moves in a cyclic, up and down trajectory in most cases. Therefore, the major task for traders is to determine the market trend. Luckily, the trend quality indicator for mt4 – download free is designed to help traders with trend detection and estimation. David Sepiashvili designed the Trend Quality Indicator to determine when there is a smooth trend and noise in the market. The trend quality indicator measures price changes over a period of time and relates them to the market noise.
The indicator uses a two-step filtering process.
- The first stage involves using moving averages to filter specified time periods. The moving average corresponds to the up and down price movement of the semi cycles. In other words, the indicator differentiates the uptrends and downtrends.
- The next step is enhancing the MA accuracy by recognizing the strength of promising trends.
In a nutshell, the trend quality indicator attempts to estimate the trend in relation to the noise. Besides informing traders about trend reliability, it also measures the gradual strength. Therefore, it can be used in any time frame and currency pair.
How to Trade Using the Trend Quality Indicator for Mt4
A green line characterizes the indicator. When the market is bullish, the indicator moves upwards. Similarly, when the trend is bearish, the indicator moves downwards. When the market trend is strong, the trend moves sharply upward or downwards. However, when there is noise in the market if the indicator moves in leftwards (straight line). In this case, the market is not trending.
Market Example
The chart above shows price movement for Great Britain Pound against the Japanese Yen (GBP/JPY). The indicator exhibits a flat movement when the market is ranging or consolidating. The red circle shows the market’s consolidation. When there is “noise” in the market, trade participants show indecision characterized by short up and down movements.
After consolidation, the market plummeted, as shown by the red arrow. In fact, the indicator also shows a sharp downward movement. The indicator shows a pullback as the market starts retracing, as shown by the green arrow.
The price movement that follows the red arrow is an indefinite trend characterized by a bearish trend and bullish corrections. During this period of market “noise,” the indicator shows a flat movement.
Conclusion
The trend quality is a perfect tool to include in your trading strategy. While it does not provide entry and exit signals, it tells when the market is trending. In general, you are likely to make money off the market when the price is in a steady trend. Since the indicator is freely available, it wouldn’t hurt to give it a try.