rollback indicators to determine the best entry points Most trading strategies involve trend trading. And that’s quite reasonable. It is the deals opened in the direction of the prevailing market trend that have a better chance of success and allow you to get a large profit. At first glance, it seems that opening an order by trend is a very simple task. However, in practice it is not quite so. There are kickbacks in any trend movement. If you open a trading position without taking into account this fact, you can go straight to the minus for corrections. To prevent this from happening, there are rolling back indicators that we will talk about today. And to begin with, I’ll talk about two main uses of them.

Use from using rollback indicators

Rollback indicators allow:

  • Find the optimal points to open trades by trend. If you enter a growing market at the minimum of correction, you can increase the profit. Correspondingly, on a downward trend the input on the maximum correction will also allow to increase the profit size. In addition, rollbacks are a good time to open additional trading positions in the direction of the main movement.
  • Close orders when signals of possible rollback appear. Moreover, sometimes the correction is actually a harbinger of a change in the direction of the price movement and the exit will be very timely.

Samples of operation of rollback indicators

Indicators of this type are many. You can find them both in the MT4 trading terminal and in the network. Stochastic can be used from standard indicators to track possible correction. It’s done as follows. The stochastic line grows on the ascending motion. From the moment it crosses the line above which the overbought zone is located, a price correction can be expected. At this time it is not recommended to enter the market in the direction of the trend. By analogy, you can monitor the rollback signal on a downtrend as well. Only in this case, the focus will be on the oversold zone.Stochastic application example:

In addition, you can use, for example, the Barry indicator to determine the probable rollback. This market analysis tool draws support and resistance levels on the chart, near which a rollback may occur:

Forex Glaz indicator, which I told you about earlier in one of the blog articles, is also suitable for this purpose. Of course, there are other options.

Those who use a trend strategy in trading should include decline indicators. This will reduce risks and increase profits.Fyodorov’s Inga13.06.2018