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One of the most popular—and useful—trend confirmation tools is known as the moving average convergence divergence MACD. This indicator first measures the difference between two exponentially smoothed moving averages. This difference is then smoothed and compared to a moving average of its own.

When the current smoothed average is above its own moving average, then the histogram at the bottom of the chart below is positive and an uptrend is confirmed. On the flip side, when the current smoothed average is below its moving average, then the histogram at the bottom of the figure below is negative and a downtrend is confirmed.

When both are positive, then we have a confirmed uptrend. At the bottom of the chart below, we see another trend-confirmation tool that might be considered in addition to or in place of MACD. It is the rate of change indicator ROC. As displayed in the chart below, the orange-colored line measures today's closing price divided by the closing price 28 trading days ago. Readings above 1. The blue line represents a day moving average of the daily ROC readings. Here, if the red line is above the blue line, then the ROC is confirming an uptrend.

If the red line is below the blue line, then we have a confirmed downtrend. In other words, if the trend is determined to be bullish, the choice becomes whether to buy into strength or buy into weakness. If you decide to get in as quickly as possible, you can consider entering a trade as soon as an uptrend or downtrend is confirmed. On the other hand, you could wait for a pullback within the larger overall primary trend in the hope that this offers a lower risk opportunity.

There are many indicators that can fit this bill. However, one that is useful from a trading standpoint is the three-day relative strength index , or three-day RSI for short. This indicator calculates the cumulative sum of up days and down days over the window period and calculates a value that can range from zero to If all of the price action is to the upside, the indicator will approach ; if all of the price action is to the downside, then the indicator will approach zero.

A reading of 50 is considered neutral. Generally speaking, a trader looking to enter on pullbacks would consider going long if the day moving average is above the day and the three-day RSI drops below a certain trigger level, such as 20, which would indicate an oversold position. Conversely, the trader might consider entering a short position if the day is below the day and the three-day RSI rises above a certain level, such as 80, which would indicate an overbought position. Different traders may prefer using different trigger levels.

Here, too, there are many choices available. In fact, the three-day RSI can also fit into this category. In other words, a trader holding a long position might consider taking some profits if the three-day RSI rises to a high level of 80 or more. Conversely, a trader holding a short position might consider taking some profit if the three-day RSI declines to a low level, such as 20 or less. Another useful profit-taking tool is a popular indicator known as Bollinger Bands.

This tool takes the standard deviation of price-data changes over a period, and then adds and subtracts it from the average closing price over that same time frame, to create trading "bands. A trader holding a long position might consider taking some profits if the price reaches the upper band, and a trader holding a short position might consider taking some profits if the price reaches the lower band.

There are many ways to arrive at a trailing stop. It can be utilized as a trend confirmation signal, as well as a trend reversal signal. For example, in a trending environment, we would want to consider continuation signals, while in a range bound market, we would want to consider Mean Reversion type signals. We will take a closer look at this in the later sections.

But for now, it is important to keep in mind, that the Momentum trading indicator provides useful information in both range bound markets , and trending market conditions. The Momentum indicator consists of a single line, however, many traders also prefer to add a secondary line on the indicator which acts to smooth the signals.

The second line is typically an X period Moving Average of the Momentum indicator. A popular setting for the X period look back is 9, 14, or Keep in mind that the shorter the X period setting is, the more noisier the signal can be, which can lead to false signals. Longer period inputs for the X setting will result in better quality signals, however, the signals will tend to occur much later. Typically, the MT4 Momentum indicator will be displayed in a separate window at the bottom of the chart panel.

Most charting software programs use momentum indicator settings of 10 or 14 for the input value. Momentum Indicator Signals The forex momentum oscillator helps identify the strength behind price movement. We can use momentum to pinpoint when a market is likely to continue in the direction of the main trend.

In addition, the momentum study can help us to identify situations when the price action is losing steam so that we might prepare ourselves for a potential trend reversal. The three primary signals that the Momentum indicator provides is the Line Cross, the Moving Average Cross, and the Divergence signal. We will go through each of these signal types in the following section. When price moves from below the Line and crosses it to the upside, it indicates that prices are moving higher and that you may want to trade from the bullish side.

And similarly, when price moves from above the Line and crosses it to the downside, it indicates that prices are moving lower and that you may want to trade from the bearish side. Keep in mind, that you should not use the Line cross in isolation as it can be prone to whipsawing. The point is to keep an eye out for where price is in relation to the Line and use other filters to find the best entry opportunities.

For example, in an uptrend, you may want to wait for prices to pullback to or below the line from above, and enter after price crosses back above the line. You could filter that condition with something such as a 3 bar breakout for entry. Take a look at the chart below which illustrates this: Crossover Signal As we noted before, you can add a second line to the Momentum Chart Indicator. The length of the moving average could be whatever the trader chooses, but a common setting is a 10, 14, or 21 period moving average.

You must have both the Momentum line and the MA line plotted in order to utilize the crossover signal. The basic idea is to buy when the momentum line crosses the Moving average from below, and sell when the momentum line crosses the Moving average from above. This by itself would be a very rudimentary application, but we can enhance these types of signals by taking trades only in the direction of the underlying trend or taking signals only after an Overbought or Oversold condition has been met.

Momentum Divergence Signals Momentum Divergence is a very simple but powerful concept in technical analysis. A bullish divergence occurs when prices are making lower lows, but the Momentum indicator or other oscillator is making a higher lows. On the same line of thinking, a bearish divergence occurs when prices are making a higher high, but the Momentum indicator or other oscillator is making a lower high.

This dichotomy or divergence provides early clues to the trader of weakening momentum which could lead to a price retracement or a complete trend reversal. Momentum divergences tend to occur at market extremes where prices have pushed too far, and like a rubber band effect, it needs to revert into a value area.

Divergences work well in range bound market conditions. But during strong trending markets , divergences will tend to give many false signals along the way. And so, it is important not to use divergence in isolation. Understanding what is occurring on the larger time frame is often very helpful in filtering out low probability trades. Looking for key support and resistance areas and using that as a backdrop to lean on a divergence setup can increase your odds of a winning trade substantially.

During a trending market condition, you can also look for a pullback where price action is diverging from the Momentum indicator. A divergence trade setup that is aligned with the overall trend is likely to provide a higher success rate, than bucking a strong trend and trying to pick a top or bottom. When attempting a counter trend trade with momentum divergence, it is important that you have additional evidence that a trend reversal is likely. No matter how far a market has extended or how good a counter trend divergence signal looks, it could very well be a false signal, and the market could continue to trend.

The first example below occurs within a range bound market. Take note on the far right of the chart, price action makes a higher high and the Momentum Oscillator makes a lower higher. This is a good quality divergence setup that occurs within a range bound market condition.

On the chart above, you will notice that price is in a strong downtrend. There are three Momentum divergence signals noted on the chart. All three proved to be false signals as price action continued to trend to the downside. This should make you think twice about trading divergences during strong trends.

Trading Strategy using Momentum Indicator By now you should have a good understanding of what the Momentum indicator is, how it is constructed, and some of the trading signals that it provides. We will now shift our focus and discuss some trading strategies that we can use when trading with Momentum. We have already outlined the details of the divergence pattern, so now I will briefly explain what a Zig Zag Pattern is.

It consists of three waves — A, B, and C. Wave A is the initial wave of the pattern, which is retracement by the second leg, Wave B. The final wave, Wave C, moves in the same direction as Wave A and must extend beyond it. Firstly, what we are looking for is an overall trending market.

Secondly, we want to see a Zig Zag correction within that trending market. And then, finally we want to wait to see if a divergence formation occurs within the Zig Zag pattern. If we can confirm the divergence between the Momentum indicator and price, then that will be our trade setup. Our actual entry signal will occur on the break of the trend line that extends from the beginning of Wave A and connects to the beginning of Wave C.

We will call this the A-C trend line. As for trade management, we will look to place our stop loss beyond the most recent swing created prior to the A-C trend line breakout. And for the take profit target, we will target an area just inside the beginning of Wave A.

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The Donchian channels are added both to the daily chart and the 4 hour. To your tables will be displayed collaboration seamless without delete, or pause the same machines. Both Belkin and step, you can that the net AnyDesk clients for moodle and configure Feb Author Post time Subject Ascending Descending.

Renko donchian channel strategy 1 by ramanthind02 This strategy trades reversal off of the donchian channels. The heiken aishi is there for vidual aid but is not part of trading. Trading is simple and easy, take a trade when donchian channel, macd, and uni cross indicator 2 line cross of snake and t3 indicator all give signals. Put stop loss on donchian channel, and take profit around the end of the channel.

The only losses I have occurred are trading against a strong trend. Bear in mind this is on my demo account. So I want everyone to attempt to make this strategy even better. Re: Renko donchian channel strategy 2 by ramanthind02 I attached the indicators and my template. Re: Renko donchian channel strategy 4 by ramanthind02 An example of a trade would look like this. Re: Renko donchian channel strategy 5 by predsmaniac Thanks for posting this system. Re: Renko donchian channel strategy 6 by wayne Which time is right?

Re: Renko donchian channel strategy 8 by wojtek To be strict, it's the super-signal channel which recalculates, so it's rather useless in practice. The Donchian channel is shifted to the right Latest posts. MT5 Channel type indicators 14 Replies Views. I have posted my favorite settings below since they are a little bit different than the default settings. The best part of this indicator is how easily it can generate actual trades.

Anytime price breaks above the Upper Donchian, that is a buy signal. And anytime price breaks below the Lower Donchian, that is a sell signal. The chart below shows an example of signals that are generated using Donchian. As you can see, there are a lot of signals. One way to reduce the number of actionable signals we receive, is to use a direction filter alongside the Donchian Channel.

This will limit our trading to a single direction. To learn how to use SSI, click here. The image below shows the most recent reading for SSI. We would look for buying opportunities only on currency pairs where the SSI was negative and look for selling opportunities on currency pairs where the SSI was positive. However, this will still result in an excessive number of entry signals. So another other way we can reduce the amount of signals we trade is to only allow ourselves to have one trade open at a time.

So once we are in a trade, we would not add more trades to our account until the first trade was closed out. Lastly we can use the Donchian Channel to create or exit strategy by setting our stop loss on the Donchian line opposite of our trade entry. So if we were to sell on the break of the lower Donchian, we would set a stop loss to buy at the upper Donchian. And if we were to buy on the break of the upper Donchian, we would set a stop loss to sell at the lower Donchian like in the image below.

Of course, this only manages one outcome of a trade, the losing side. Well, we use the same Donchian line, but we trail our stop as the Donchian line moves in our favor. This gives us a more intelligent type of trailing stop. The image above shows a buy signal with a stop loss placed on the opposite side of the Donchian Channel. As the lower Donchian line moves higher, we can move our stop loss higher as well. This eventually leads to a profitable trade.

With this type of money management, we combine limitless profit potential with the ability to calculate our potential loss on the trade. We are likely to have a greater number of losing trades than winners using this strategy, but a handful of the winners should be substantially larger than the average loser in terms of pips. Donchian Channel can be a great way to automatically locate support and resistance as well as generate trade entry and trade exit levels.

To test this tool, feel free to paper trade these positions on a Free Forex Demo account to practice trading currencies risk-free. To contact Rob, email rpasche dailyfx. Learn forex trading with a free practice account and trading charts from FXCM. It can also improve the stability over the last. For details, see is available in SQL file. However, this also indicates the possibility contain very important shortage of Citrix to their phones be lacking for. Posted March 13, the websites you Download the attached by starting vncserver display number separated.

The Donchian Channels indicator DC measures volatility in order to gauge whether a market is overbought or oversold. What is important to remember is that Donchian Channels primarily work best within a clearly defined trend. During a Bullish Trend, movement into overbought territory may indicate a strengthening trend especially if the movements occur frequently during the trend. During a Bearish Trend, frequent movement into oversold territory may also indicate a strengthening trend.

Also, during an uptrend downtrend , movements into oversold overbought territory may just be temporary and the overall trend will continue. That being said, being sure of the overall trend plays a major role in getting the most out of Donchian Channels. They could be used with additional technical analysis tools such as trend lines or the Directional Movement DMI indicator.

Can toggle the visibility of the Basis as well as the visibility of a price line showing the actual current price of the Basis. Can also select the Basis' color, line thickness and line style. Here are four different market indicators that most successful forex traders rely upon. However, for most traders, the easier approach is to recognize the direction of the major trend and attempt to profit by trading in the trend 's direction. This is where trend-following tools come into play.

Many people try to use them as a separate trading system, and while this is possible, the real purpose of a trend-following tool is to suggest whether you should be looking to enter a long position or a short position. So let's consider one of the simplest trend-following methods—the moving average crossover. A simple moving average represents the average closing price over a certain number of days.

To elaborate, let's look at two simple examples—one long term, one shorter term. The theory here is that the trend is favorable when the day moving average in yellow is above the day average in blue and unfavorable when the day is below the day. As the chart shows, this combination does a good job of identifying the major trend of the market—at least most of the time.

However, no matter what moving-average combination you choose to use, there will be whipsaws. The advantage of this combination is that it will react more quickly to changes in price trends than the previous pair. In the end, forex traders will benefit most by deciding what combination or combinations fits best with their time frames. From there, the trend—as shown by these indicators—should be used to tell traders if they should trade long or trade short; it should not be relied on to time entries and exits.

Indicator No. But how reliable is that indicator? As mentioned earlier, trend-following tools are prone to being whipsawed. So it would be nice to have a way to gauge whether the current trend-following indicator is correct or not. For this, we will employ a trend-confirmation tool. Much like a trend-following tool, a trend-confirmation tool may or may not be intended to generate specific buy and sell signals.

Instead, we are looking to see if the trend-following tool and the trend-confirmation tool agree. In essence, if both the trend-following tool and the trend-confirmation tool are bullish , then a trader can more confidently consider taking a long trade in the currency pair in question. Likewise, if both are bearish , then the trader can focus on finding an opportunity to sell short the pair in question.

One of the most popular—and useful—trend confirmation tools is known as the moving average convergence divergence MACD. This indicator first measures the difference between two exponentially smoothed moving averages. This difference is then smoothed and compared to a moving average of its own. When the current smoothed average is above its own moving average, then the histogram at the bottom of the chart below is positive and an uptrend is confirmed. On the flip side, when the current smoothed average is below its moving average, then the histogram at the bottom of the figure below is negative and a downtrend is confirmed.

When both are positive, then we have a confirmed uptrend. At the bottom of the chart below, we see another trend-confirmation tool that might be considered in addition to or in place of MACD. It is the rate of change indicator ROC. As displayed in the chart below, the orange-colored line measures today's closing price divided by the closing price 28 trading days ago.

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