Introduction to the Alpha Trend Spotter PA Indicator
Trend reversals are probably one of the most basic trading setups that traders take. The concept is simple. Traders only need to identify when price action is about to reverse in the opposite direction. Although this concept seems easy but in practice it is quite difficult to identify trend reversals.
The Alpha Trend Spotter PA Indicator is an indicator which identifies potential trend reversals. It is a tool which traders can use to help them identify potential trend reversals and trade according to its signals.
What is the Alpha Trend Spotter PA Indicator?
The Alpha Trend Spotter PA Indicator is a trend following signal indicator. It is a very simple indicator which plots arrows to point the direction of an identified trend.
This indicator plots lime arrows pointing up to indicate a bullish trend reversal and pink arrows pointing down to indicate a bearish trend reversal.
How the Alpha Trend Spotter PA Indicator Works?
This indicator uses a complex algorithm which compares the highs, lows, open, and close of a price candle to detect trend and momentum changes. It then plots the arrow on the succeeding candle whenever it detects such trend reversals in the context that price typically continues to move in the direction of the momentum.
How to use the Alpha Trend Spotter PA Indicator for MT4
The Alpha Trend Spotter PA Indicator has no settings options wherein traders can adjust the sensitivity of the indicator.
The Alpha Trend Spotter PA Indicator is basically a trend following signal indicator. Traders can use it as such, a trend reversal signal. Users can open trades whenever the indicator plots an arrow pointing the direction of the trend reversal. However, it is best used in conjunction with price action and with the confirmation of candlestick patterns as this would significantly increase the probability of the trades the indicator identifies.
Buy Trade Setup
When to Enter?
Open a buy order as soon as the Alpha Trend Spotter PA Indicator plots a lime arrow pointing up in confluence with a preceding bullish engulfing candle. Set the stop loss on the support below the entry candle.
When to Exit?
Close the trade as soon as price action shows signs of a bearish reversal.
Sell Trade Setup
When to Enter?
Open a sell order as soon as the Alpha Trend Spotter PA Indicator plots a pink arrow pointing down in confluence with a preceding bearish engulfing candle. Set the stop loss on the resistance above the entry candle.
When to Exit?
Close the trade as soon as price action shows signs of a bullish reversal.
Conclusion
The Alpha Trend Spotter PA Indicator is a simple trend following signal indicator which traders can use as a basis to open trades. However, it is not a highly reliable signal indicator. The signals it produces are not always accurate. It does still produce trades that would result in a profit but it is best traded in confluence with other technical indications.
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