Trend Following (HTF ONLY)

The Trend Following (HTF ONLY) indicator provides a robust framework for identifying long-term market direction by filtering out minor price fluctuations through high-timeframe analysis and percentage-based offsets.

Usage

The tool is designed specifically for swing trading and higher timeframe analysis, such as the 4-hour, 12-hour, or Daily charts. It identifies the core market trend using a central mean line and two offset boundaries.

• Trend Identification: When the price action remains above the central red mean line, the market is considered to be in an uptrend. Conversely, trading below the red line indicates a downtrend.
• Confirmation & Noise Reduction: To avoid "choppy" price action and false signals in sideways markets, the indicator uses upper and lower offset lines (yellow/blue).
  • A Trend Change Breakout is confirmed when the price closes above the higher offset line, signaling a potential bull market.
  • A Trend Change Breakdown is confirmed when the price closes below the lower offset line, signaling a corrective phase or bear market.
• Moving Average Filter: Users can enable an additional Moving Average to act as a secondary trend filter for further confirmation.

Details

The indicator calculates the highest high and lowest low over a user-defined lookback period. These values are then processed through a Running Moving Average (RMA) to derive the central "B33 Mean." The offset lines are calculated by adding and subtracting a user-defined percentage of the current price from this mean. By utilizing request.security, the script can pull data from specific timeframes to ensure the trend lines remain stable even when switching between lower chart intervals, making it a dedicated tool for Higher Timeframe (HTF) confirmation.

Settings

Main Settings

• Enter number of Bars: Sets the lookback period for calculating the highest high and lowest low.
• Offset (useful for Stoploss/Confirmation, in %): Determines the distance of the outer bands from the mean, used to filter out noise.
• Timeframe for B33: Defines the specific timeframe from which the high/low data is pulled.
• RMA for bar average: Controls the smoothing period of the RMA used to calculate the mean.
• Enter Moving Average filter period: Sets the length of the EMA used as an additional trend filter.

Visual Settings

• Show MA?: Toggles the visibility of the secondary Trend Moving Average.
• Show Trend change Breakouts?: Enables or disables the visual labels for bullish trend changes.
• Show Trend change Breakdowns?: Enables or disables the visual labels for bearish trend changes.

FAQ

How do I access Trend Following (HTF ONLY)?

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

What timeframes are best for this indicator?

This indicator is optimized for high timeframes. It is best used on 4H, 12H, or Daily charts for swing trading. It is not recommended for scalping.

What do the different lines represent?

The central line represents the smoothed mean of the high/low range. The outer lines represent percentage-based offsets used to confirm that a trend has sufficient momentum to break out of a sideways range.