Understanding the Traditional iTrend Indicator
Hey traders! If you’re diving into the world of MetaTrader 4, you’ve probably heard about the Traditional iTrend indicator. Developed by Andrew and refined by Dr. Gaines, this trend indicator packs a punch with its versatile settings. It uses a two-colored histogram to showcase both the direction (in red) and strength (in blue) of the trend. The main signals to watch for include crossing the zero line, hitting new highs and lows, and spotting divergences.
How to Trade with iTrend
Let’s break it down:
- Go Bullish: If the red line is above zero and on the rise, it’s a good time to consider going long. If the blue line is below zero and dropping at the same time, this signals that the uptrend is gaining momentum.
- Go Bearish: Conversely, if the red line dips below zero and continues to decline, look for shorting opportunities. If the blue line is above zero and rising simultaneously, it indicates that the downtrend is strengthening.
Common Parameters for iTrend
Now, let’s talk about the parameters that influence both the red and blue lines:
- Apply to: This sets the foundation for the indicator's calculations, typically using prices like Close or Open.
- Trend Direction Line (Red): This is calculated using the Bollinger Bands, so its settings mirror those of the bands:
- Mode: Choose the Bollinger Bands line for calculation: Main, Top, or Bottom.
- Period: This dictates the timeframe for the iTrend indicator.
- Deviation: This specifies the deviation for the iTrend.
- Trend Strength Line (Blue): This is derived from Alexander Elder's Bears Power and Bull Power indicators.
- Period: Similar to the red line, this defines the timeframe for the trend strength line.
With this understanding of the Traditional iTrend indicator, you’re well on your way to enhancing your trading strategies on MetaTrader 4. Happy trading!
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