What are Trend Indicators? Trend indicators are technical analysis tools that use price action to recognize price patterns and identify the true direction of the trend.

Trend Indicators in Technical Analysis (TA)

Trend indicators are technical analysis tools designed to identify the direction and strength of any market trend. These tools are helpful in confirming whether an asset is trending or ranging, allowing them to make better trading decisions.


 

Trending/Ranging Financial Markets

(i) Trending Market: When the price of a financial asset or market follows a specific trend over a long period of time.

(ii) Ranging Market: When the price of an asset or market moves up and down without following a specific long-term trend (trading within a range formed by an upper and a lower band).


 

Trend Indicators Are Reliable Only in Trending Markets

□ If a financial market is trending, trend indicators can provide highly reliable trading signals.

□ If a financial market is ranging, trend indicators may mislead traders. (In a ranging market, traders should instead use momentum indicators, which are better suited to identifying short-term price movements within the range.)

 

Table: Trend Indicators at ExpertSignal.com

  UTILITY SETTINGS MORE
□ Standard Deviation (SD)
  • Measuring Volatility
  • Confirming Price Reversals
  • 20/21 Periods
► Standard Deviation
□ Moving Averages (MAs)
  • Evaluating Trends
  • Spotting Reversals (MA Crossovers)
  • 30-period
  • 50-period
  • 200-period
► Moving Averages
□ Parabolic SAR
  • Identifying Trends/Reversals
  • Catching a trend reversal and following it using a trailing stop
  • 2% acceleration factor
  • 20% maximum step
► Parabolic SAR

□ Bollinger Bands (BB)

  • Measuring Volatility
  • Identifying Reversals
  • Entry/Exit Triggers
  • 20 Periods SMA
  • 2 SDs
► Bollinger Bands
□ Ichimoku Kinko Hyo
  • Evaluating Trends
  • Overbought/Oversold
  • Spot Trends/Reversals
  • Tenkan-Sen (9)
  • Kijun-Sen (26)
  • Senkou Span (52)
► Ichimoku
□ Fibonacci Sequence
  • Calculating Support & Resistance Levels
  • 0.618 level
  • 0.382 level
  • 0.236 level
► Fibonacci Trading
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