TriggerLines indicator based on moving averages
Moving averages do not lose their popularity over the years. They are part of many trading strategies. Both classical MA variants and indicators based on them are used. Tonight I’ll tell you about one of them – it’s TriggerLines.
In the chart of the traded instrument it is displayed as two lines. The first of them is the SMA with a given period. And the second one has a horizontal shift relative to the first line. And that’s why it’s smoother. On this basis, 2 parameters are provided in the settings.
First Moving Average period can be set using the Rperiod parameter. And the shift of the second line in relation to the first one – using the parameter LSMA_Period.
I want to warn you that to improve the quality of signals for large timeframes you need to set a higher value of Rperiod, and for small TF – low.
What concerns the parameter LSMA_Period, it should also be selected depending on the trading method. The greater the value of the parameter, the greater the distance between the lines. Their intersection is one of the conditions for entering the market. This means that too much shift can lead to signal delay, which is certainly undesirable. Therefore, in short-term trading, the lines should be close to each other.
The TriggerLines indicator forms two types of signals: intersection of lines and change of their color.
Open the buy order if the second line (with a shift) crosses the first line from bottom to top. The color change is observed (from red to blue).
Open the sell order if the second line (with a shift) crosses the first line from top to bottom. Their color changes (from blue to red).
Emportant note: this indicator is not intended for trading during the flat. Of course, it will generate signals in this situation, but the share of false signals will be very high. That’s why it’s better to ignore the indicator signals when flashing.
The final result of TriggerLines trading depends on the optimal selection of parameter values in the settings. This should be done on a demo account, taking into account the timeframe and the peculiarities of the currency pair. By the way, it is noticed that this tool allows you to trade profitably under one condition. The number of candlesticks between the local maximum and minimum should be greater than the value of Rperiod.