Trading systems that scream from the rooftops how good they are, honestly, two cents. Many systems promise you the moon on a stick, guaranteed! However, all too often the reality falls far short of what was promised.
So when I come across a system that looks professional with understated marketing, it catches my eye. Trend Signal has built a good reputation within the trading community, so I made it a priority to review the software on behalf of my members.
trend signals
The Trend Signal package offers six indicators that you can combine to assess a potential trade. Each of these is automatically generated, so all you need to do is figure out the best way to trade them together. The indicators work for all time frames and in all markets, as long as there is sufficient liquidity (enough people trading the market). Here are the 6 indicators:
1. Price of envelopes: these work around a moving average of a stock or Forex price. The most common price envelopes are Bollinger bands or Keltner channels. The logic behind them is similar to the law of averages, which states that everything revolves around an average or “normal” state. Sometimes things go to extremes and you get an activity that goes way beyond the norm. When this happens, in theory, things should slowly start to return to normal. Price envelopes in trading revolve around a moving average with upper and lower bands. These upper and lower bands act like the bungee cords in a wrestling ring. Most of the price action will take place within the confines of the ring, but sometimes the price action gets extreme and hits the ropes. The strings are springy, so this extreme action is likely to result in a quick bounce. When this happens, you can use price envelopes to predict when a withdrawal is due. Like an American wrestler running against the ropes, the harder he hits them, the faster he bounces back. Trend Signal draws its own price envelopes. The idea is to use them to detect points where the trend is likely to reverse or continue. Trend reversals to the bottom or top of the envelope offer the greatest reward potential because they indicate that the price has reached unsustainable levels.
In the screenshot below, you can see the upper envelope snaking up at the top of the image, the moving average around the center (ending around 589), and the midpoint between the two indicated by the dotted line.
2. The trend signal: this was the original indicator behind the software. There is a famous trading maxim that says “The trend is your friend”. All very well, but how do you know when a new trend has started or an old one is about to end? Trading with the trend can be very profitable, but entering too early or too late can be devastating to your financial health. The trend signal helps you spot the trend direction in one easy indicator. When it changes from green to red, it indicates that a trend change is imminent. The trend signal is at the bottom of the chart, moving between a scale of 1 to 100. The line represents the emotional state of the market. The line turns green to represent buying pressure and red to represent selling pressure. The strategy is to take signals when the trend signal changes from green to red and vice versa. Good signals occur below 30 and above 70, the best signals occur below 10 and above 90. The idea is that when the trend signal reaches a high level like 90, the market is overbought and ready. to go back. When the trend signal reaches a level like 10, the market is oversold and ready to bounce. Therefore, taking signals based on the color change from red to green or vice versa is supposed to be more valid.
3. Pivot Points: Trend Signal automatically draws horizontal lines known as pivot points. These are often based on previous highs and are meant to represent potential future points at which the trend will reverse. These pivot points can be very useful for placing stops or price targets. The price usually stumbles or reverses around these levels, so they can be incredibly useful.
4. Sniper Circles: these are yellow circles drawn on the chart that represent a significant potential trend counter. They appear when Trend Signal detects the following:
- A pivot point that is closing
- The trend signal turns green or red.
- A reversal candlestick pattern.
Sniper rings are relatively rare, but they collect 60% of high-profit trades. The absence of a sniper ring does not mean that a trend will not reverse.
5. Vector average: this is a shorter term indicator than the trend signal and changes from red to green and vice versa. The vector average is displayed with the price as a moving average. Green indicates an uptrend, while red indicates a downtrend.
6. Stop step: this indicator will follow the price up and down and will adjust based on the severity of the trend. This stop is not perfect but it is a very useful guide.