trend is your friendThat is because trading with the trend is considered to be the safest and therefore most profitable type of trading forex. The 2 most important rules to follow when trading with the trend are that:
- the traders must open their trades according to the trend, usually on higher timeframes. So, for example, if the trend on D1 is falling, the trader should only open sell positions. Vice-versa for buy and the uptrend
- the traders must enter the trade when the price goes against them, forming swings also called as higher-lows (for buy) or lower-highs (for sell).
|Heiken Ashi expert advisor|
A good trend trading expert advisor should be able to identify the trend as well, not only enter trades when HL or LH are formed. Looking at the picture below, we can see that the expert advisor changed the chart’s color depending on the trend. In this case, the entry is given by the change of color of the black-white moving average that follow the price.
|NonLagMA expert advisor for MetaTrader|
Many other indicator signals can be used to build a good expert advisor that can trade with the trend, both custom or built in MetaTrader, such as this MACD expert advisor that can detect the trend using MACD indicator and enter trades accordingly, after confirming the entries with the Stochastic indicator.
TIP: sometimes there’s no need to switch timeframes to detect the trend, it is enough to just zoom out the chart and see whether the price goes from left-up to right-down (downtrend), or from left-down to the right-up side of the chart (uptrend).