How to Trade with the Big Trend Indicator

Here, we will introduce 5 high probability technical indicators that are used on an MetaTrader platform, along with a detailed analysis on how each technical indicator works. There are two types of technical indicators that can provide traders with a clear indication regarding the probable direction of the market – Trend Indicators and Oscillator Indicators. Trend Indicators are technical indicators that primarily indicate the general direction of the market, whether it is in an uptrend or in a downtrend.

In a trending market, trend indicators are very valuable as it significantly increases the win probability of a trend following strategy. In many cases, trend indicators may also be used to signal trend reversals which could also be a very profitable type of trading strategy. Oscillator Indicators on the other hand is a type of technical indicator which plots a separate line, histogram or any charting method which could show the indicator oscillating around a midline MT4 indicators.

In some cases, these oscillators can move freely and unbound by a range, while in some indicators the oscillator is bound within a fixed range. Oscillators can also be used to identify momentum and trend. However, oscillators were primarily developed in order to help traders identify overbought and oversold market conditions, as these overextended market conditions are prime conditions for a mean reversal, which could also develop into a full-blown trend reversal.

The Alert SMA-EMA indicator is a trend following technical indicator which is based on a pair of underlying moving average lines. A moving average line is a line plotted based on an average value calculated from prices over a preset period of time. For example, if the moving average line is preset at 10 period, the closing value for the last 10 candlesticks are averaged. This average number represents a point on the price chart which would connect the moving average line.

SMA stands for a Simple Moving Average. This is the most basic form of a moving average line. It basically sums up the total figures and divides it by the number of periods used. EMA on the other hand represents an Exponential Moving Average. This form of a moving average line modifies its underlying moving average computation. It places more weight on the most recent price data compared to former periods in order to make the moving average line more responsive.