Forex Line Indicator
A great Forex Line indicator for trading with the trend. A perfect trend reversal detector.
Description
The Forex line indicator is an improvised version of the moving average. The indicator is embedded in the main trading price chart. It features a line that changes color from blue to white and vice versa depending on the market direction.
The indicator is easy to use. You don’t have to interpret hard figures and complex lines. Simply identify the color of the dictator line and trade accordingly. This means the Forex Line indicator is suitable for both seasoned and experienced traders. You can also use the indicator for long term and short term trading.
How to trade using the Forex Line Indicator
As mentioned, the forex line indicator gives trading signals by changing the color of the line. It works best on a high time frame, such as one day to weekly timeframes. While you can use it in lower time frames, the price fluctuation makes the indicator line prone to frequent color changes. Using it on a daily time frame enables you to catch substantial pips and reap good profits. In addition you should use the indicator line during a trending market and eschew ranging markets.
Buy Signal
Wait for the indicator line to change from white to blue. The price should move above the indicator. In fact, the line acts as a suitable trailing stop loss. Exit when the line changes from blue to white, indicating a market reversal, and the price chart crosses below the indicator line.
Sell Signal
The indicator gives a sell signal when the line color changes from blue to white. The instrument price chart should also move below the indicator line.
Real Market Trading Example
The chart above shows the price movement for gold against the US dollar. During an uptrend, the indicator posts a blue line. However, the trend reverses, and the line changes color from blue to white, giving a sell signal. Notice how the price chart is trading below the indicator line. Exit the trade when the indicator line changes color from blue to white. It is prudent to use other indicators for confirmations. For instance, you can incorporate price action.
Conclusion
The forex line indicator is one of the simple-to-use indicators. It is designed to work best for forex trading and endeared most traders who use moving average trading strategies. You simply need to interpret the indicator line colors. If the line changes color from white to blue, that is a buy signal, while a change from blue to white is a signal to go short. You will want to use other trend indicators to establish confluence and get more accurate signals.