Introduction to the Brooky Trend Strength Indicator
Trending continuation strategies are some of the easiest types of strategies to trade. However, not all traders have the skill to effectively identify trending and non-trending markets.
The Brooky Trend Strength Indicator is a technical analysis tool which can help traders objectively identify trending and non-trending markets.
What is the Brooky Trend Strength Indicator?
The Brooky Trend Strength Indicator is an oscillator which indicates trend strength. It plots bars that oscillate around zero. Positive bars indicate that the market has a tendency to trend while negative bars indicate that the market is not trending. The higher the bar, the stronger the trend.
The color of the bars indicates the direction of the trend. Blue bars indicate a bullish trending market while red bars indicate a bearish trending market. Pink bars indicate a weakening bullish trend, while dodger blue bars indicate a weakening bearish trend.
It also plots a signal line which oscillates along with the bars. The market is picking up momentum or is starting to trend whenever the bars cross above the signal line and is starting to weaken whenever the bars cross below the signal line.
How the Brooky Trend Strength Indicator Works?
The Brooky Trend Strength Indicator uses a complex mathematical formula within its program which compares the variance between the Average True Range (ATR) of price and its corresponding Standard Deviation. This is the basis for how the bars are formed.
As for the signal line, it is a moving average line of the histogram bars.
How to use the Brooky Trend Strength Indicator for MT4
This indicator has several variables within its indicator settings.
The “slow_period”, “fast_period”, and “signal_period” variables refer to the number of bars used to calculate the underlying moving average lines as well as the signal line.
The “slow_period_method”, “fast_period_method”, and “signal_period_method” fields allow users to choose what type of moving average line is used.
“Price_Constant” refers to the price point on each bar used as the price input for the formulas.
This indicator can be used to identify trending markets based on whether the bars are generally positive or negative.
It can also be used as a trend continuation entry signal based on the crossing over of the bars and the signal line as well as the color of the bars.
Buy Trade Setup
When to Enter?
Open a buy order as soon as blue bars cross above the signal line and are positive. Set the stop loss on the support below the entry candle.
When to Exit?
Close the trade as soon as the bars cross below the signal line.
Sell Trade Setup
When to Enter?
Open a sell order as soon as crimson bars cross above the signal line and are positive. Set the stop loss on the resistance above the entry candle.
When to Exit?
Close the trade as soon as the bars cross below the signal line.
Conclusion
This indicator is an excellent trend strength indicator. Traders can easily identify trending and non-trending markets using this indicator. However, it can also be quite confusing to use for some beginners as it is not like the typical oscillator wherein bars or lines move up when the market is bullish and down when the market is bearish. With a little practice this indicator can be a useful tool for trend following traders.
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