Trend Filter Forex Indicator is an oscillator that recognizes trend and flat areas of the market without redrawing signals.
Trading with the trend is one of the most popular strategies in the foreign exchange market. After all, making money on long and fast price movements is much more efficient than trying to squeeze out at least some profit from a flat market, where the value of an asset can vary within a few points for hours.
That is why it is so important to be able to determine whether the market is in a favorable condition for active trading. Even experienced traders are not always able to correctly interpret graphics and volumes, since the ability to understand the picture on the chart is developed over years of hard work.
In order to make trading easier for all traders, forex developers create algorithms capable of analyzing the markets, determining the dominance of a trend or a flat. The Trend Filter indicator fits this description perfectly.
Take a look at another free forex indicator by Altra: Altra FF News download
Trend Filter Indicator Description
Trend Filter is a highly effective trend indicator. It compares favorably with other trend indicators in that it is able not only to determine the price trend (upward or downward), but also to highlight areas where the currency pair is in a state of no clear trend. In other words, in a flat market.
The main advantage of the Trend Filter indicator is that it does not repaint after the bar closes. In other words, with the generation of a new candle or bar, the entire previous line remains unchanged, and smoothing does not occur.
Trend Filter Indicator is a moving average displayed in a separate window with two levels. It looks like an oscillator. The line can be painted in 3 colors: yellow, green and red.
The TF indicator is generally intuitive: the yellow line represents the active phase of the trend in the direction of the indicator, the green line is the flat phase of the uptrend and the red line is the flat phase of the downtrend.
Trend Filter Indicator Inputs
The TF indicator has only two parameters:
- Nbars is the indicator period. It determines how many previous candles are included in the analysis of the market phase. The lower it is, the more sensitive Trend Filter indicator is to price changes. This setting depends on the trading strategy: if a trader is scalping, that is, then the optimal value of the parameter is 20 – 30. In long-term trading, aimed at rare and wide movements, it is better to set it within 50 – 80.
- MA_Period is the moving average period. It is responsible for the sensitivity of the indicator line itself. The default is 9. This value should be left as is, as it gives the best ratio of profitable/false signals.
My conclusion on the Trend Filter Indicator
Trend Filter Indicator can be a very useful for traders regardless the experience level! Especially the users who trade with the trend will find it rather effective.
We recommend using this tool with other trending indicators to confirm their signals. Please note that it is a filtering indicator and not a stand-alone software.
For example, you can use it together with Forex Xcelerator, this combo will skyrocket your account balance for sure!