Trend Bars Indicator Guideline
Trend Bars Indicator is an MT4 trend finder that visually indicates the main path of any trading instrument. This MT5 technical indicator follows price fluctuations in the form of trend bars to determine the general price direction of the financial asset. Hence, it is a trend-following MetaTrader indicator. The Trend Bars indicator for Tradingview is based on comparing the magnitude of recent price changes.
Indicator Guidelines
What are Trend Bars ?
Trend Bars are plotted by the trend bars indicator in a separate window below the price graph. To explain, it is a technical analysis tool that analyzes the price fluctuation based on a previous predetermined period to conclude if the price of the asset is going up or down. In other words, if the overall movement is Bullish or Bearish. Its analyses and algorithms originate from the 14-period RSI tool.
Colored bars are not that accurate in detecting entry and exit points. To explain, its line tool alternates between red and green colors once the trend changes. Yet, it can alert you of the trend reversal after a short period of the event and not immediately. Hence, it is a lagging trend tool. The good news is that the Trend bars indicator works on every asset available and on every time frame. However, professionals advise using it with trending pairs on the M15 timeframe.
The indicator displays a series of long vertical lines that designate trend bars. These lines reflect bullish and bearish sentiment over time. Note that there are two bar types and each bar type has its color.
Red Bars
Red bars appear in a period of falling prices. They reflect a bearish sentiment among investors.
Green Bars
Green bars appear in a period of rising prices. They reflect a bullish sentiment among investors.
Note that the indicator is customizable, meaning that you can change the colors of each line depending on your preferences.
How to read the indicator ?
Trend Bars of the indicator are so easy to read. As we stated earlier, the indicator displays 2 lines. One Green line for a Bullish uptrend move and another Red line for a Bearish downtrend movement.
However, the indicator lags and signals the reverse after a short period of its occurrence.
In the following example, we’re going to demonstrate how to read the indicator on the EUR USD M15 chart.
The indicator detected the UPTREND after a few candles of the real-time occurrence. Once it detects a trend reversal, the indicator alerts users so they may take action.
Also, the indicator has detected the start of a DOWNTREND in a delayed manner. It was so delayed that It could have cost users a lot of money.
The line dividing the 2 sticks (of an UPTREND and a DOWNTREND) is equal to zero. The size of the stick is related to the value of the price and index.
How to trade using Trend Bars Indicator ?
Trading using the Trend Bars Indicator is a little bit complicated, because, as we stated earlier, the indicator gives a delayed alert.
Thus, you can use the indicator to follow the trend. But it is advised to implement another complimentary technical indicator along with it, such as a volume indicator, a Pattern-detecting indicator, or any other indicator.
Example – EURUSD M15
As an example, we’re going to demonstrate a strategy where we used the indicator alongside another technical to analyze the USD EUR M15 currency chart.
As illustrated by the chart above, the Trend bars indicator has detected the sharp Bearish DOWNTREND, but the alert was delayed waiting for confirmation. However, after implementing the Bollinger bands indicator, we’ve got the needed confirmation of the potential Trend reversal. This confirmation helps in avoiding catastrophic loss for those who hold the asset but also helps in realizing a large profit margin for those waiting to buy the asset.
To conclude, it is advised to use a second technical indicator to confirm the trend reversal or to confirm whether you should sell or buy the asset. Because the Trend Bars indicator makes some delayed alerts and those alerts could be devastating for some traders/investors.
Download Trend Bars indicator for MT4
The Trend Bars Indicator MT4 is an efficient tool that displays the current Trend in MetaTrader 4 charts. Yet, it has one major drawback because it does sometimes send a delayed alert to users as it takes a lot of time to get a confirmation.
As illustrated by the following example, the technical tool detected the reverse, but it was a little bit delayed. This delay would have cost traders a fortune, that is why it is advised to use it alongside other technical indicators.
Download Trend Bars indicator for MT5
The Trend Bars Indicator for MT5 is an efficient tool that displays the present Trend on MetaTrader 5 charts. Yet, it is a lagging tool for trend reverses.
In the following example, the indicator has detected ON TIME the start of the sharp DOWNTREND on the USD JYP M15 currency chart, which helps in avoiding catastrophic losses. However, the indicator hasn’t detected the UPTREND on time, which made traders skip some important profit margins.
Download Trend Bars indicator for Tradingview
The Trend Bars indicator TradingView does just the same job as on other trading platforms.
Also, it could be more efficient to use on Tradingview because of the big complementary indicators library available on the platform.
Furthermore, the limitless choice of tools available on TradingView makes the user capable of creating infinite combinations of technicals that could confirm the reversal alerts of Trend Bars.
Conclusion
The Trend Bar Indicator is a flexible tool that works on every asset and on every time frame available. It has only one major drawback as it can detect a delayed trend reversal. Professionals advise using the indicator alongside other indicators that could confirm the potential trend reversal before the Trend Bar indicator alerts of it.