Trend Lines

Our "Trend Lines" indicator is a powerful tool designed to detect and highlight significant trendlines on your chart while minimizing clutter. Tailored for real-time trading, it includes advanced filters and estimates trendline angles for more precise analysis. This tool is ideal for traders looking to use trendlines as part of their trading strategy.

How to Trade with the Trend Lines Trading Indicator?

Trendlines play a crucial role as support and resistance levels with multiple tests, signaling a stronger support/resistance role. Our indicator eloquently highlights these lines to help traders pinpoint them easily.

When a trendline is broken, it could be a sign of a potential trend reversal, making this indicator essential for identifying and taking advantage of these critical market shifts. Trendline breaks are conveniently labeled on the chart.

To make the analysis even more efficient, traders can filter trendlines by their angles, only displaying those within a specific range.

This customizable feature allows users to declutter their charts and focus on the trendlines that matter most, such as steeper or more horizontal ones.

Technical Details of the Trend Lines Indicator

When a swing, or pivot point, is detected, the indicator draws a trendline based on specific conditions. A key condition is that a Bearish Trendline (red) appears on a lower high, while a Bullish Trendline (blue) shows up on a higher low.

Initially, a dotted-style TrendLine is presented, progressing into a solid-style secondary TrendLine, which is used for real-time break detection.

Users have the option to apply different conditions for more tailored analysis:

Detecting Swings

A swing occurs when a high/low stands out as the extreme point against several others, determined by the "Length" setting. Visual aids like yellow flags mark confirmed swings and trigger trendline drawing based on these criteria.

After initial confirmation, trendlines evolve with the market, progressing until a new trendline is formed or a break occurs.

• New trendline formation
• Trendline breaking

Understanding Breaks Between Swings

Once the trendline criteria are met, the indicator can filter out lines based on breaking activity, controlled via "Check breaks between."

• Disabled: Allows the initial TrendLine to be pierced.
• Check breaks between point A - point B: No breaks between Swing points are permitted.
• Point A - Current bar: Prohibits breaks from the first Swing point to the confirmation point.

Managing TrendLine Breaks

The secondary, solid TrendLine continues to update with market progress until broken or replaced. A reappearing trendline can signal multiple trades, controlled by the "Minimal bars" setting, which determines the sturdiness of a TrendLine before break considerations.

Users can tailor the signal frequency for breaks by adjusting this setting, as shown below:

Calculating Angles More Accurately

While traditional methods use equal units for X and Y axes to calculate angles, this is challenging given that the X-axis uses bars and the Y-axis uses price. Our solution, the calculate_slope() function, effectively normalizes angles by examining price differences over a set bar range.

Setting preferences for the visible chart ratio allows traders to see angles reflecting true market conditions, adjustable via "Angles -> Ratio X-Y axis."

Settings: Angles - Ratio X-Y axis:

Customizing Indicator Settings

Swing Detection

• Length: Defines the lookback period for detecting swing points.

Trendline Validation

• Check breaks between:

  • Disabled: TrendLines can be pierced.
  • Check breaks between point A - point B: Prevents pierces between points.
  • Point A - Current bar: Blocks pierces post swing confirmation.

• Source (breaks): Determines invalidating conditions, default is close.

TrendLine Break Management

• Minimal bars: Specifies the minimum uninterrupted bars before a break signal.

Angle Adjustments

• Show: Toggle angle labels.
• Ratio X-Y axis: Adjusts viewing preferences to align angles with expectations.
• Only TrendLine between: Restricts trendlines to set degree parameters.

FAQ

How can I access the Trend Lines indicator? You can get access on the LuxAlgo Library for charting platforms like TradingView, MetaTrader (MT4/MT5), and NinjaTrader for free.