Useful Indicator for Trend Following Trading Strategies

Introduction

• Topic: An indicator useful for identifying bull and bear trends.
• Target Audience: Traders who follow trend-trading strategies.
• Purpose: Combine the indicator with an existing strategy for comprehensive trading insights.

Indicator Overview: Indian Oscillator

• Platform: Trading View
• Example Pair: USD/CAD
• Components:
  • Green Line: Bullish component
  • Red Line: Bearish component
  • Yellow Line: Signal line
• Usage: Measures variations and trends in the price of financial assets (stocks, currency pairs).
• Key Functionality:
  • Bullish trend: Green line above Red line
  • Bearish trend: Red line above Green line
• Signal Line Purpose:
  • Filter for reducing crossover signals
  • Enter positions when components cross signal line
  • Not used in showcased strategy

Configuring the Indicator

• Customize Length: Affects sensitivity to price fluctuations
  • Lower length (e.g., 10): More sensitive, more signals
  • Higher length (e.g., 200): Captures long-term trends
  • Suggested Length: 50 for balanced sensitivity

Example Strategy with Additional Indicators

Required Indicators

1. Indian Oscillator
2. Lawrence Activator (for long-term trends)
3. GLA Crossover (Buy/Sell signals)

Configurations

1. Lawrence Activator (LMA)
   • Double Click
   • Length: 500
   • Multiplier: 2
   • Style Tab: Disable activator, buy and sell circles
2. GLA Indicator
   • Default settings for LMA indicator
   • Blue Moving Average: Above red for bullish trend
   • Blue Moving Average: Below red for bearish trend

Trading Strategy Setup

1. Long Position

   • Confirm Bullish Trend: Blue MA above red MA, area between colored blue
   • Identify Pullback: Green line below red line, then above again
   • GLA Buy Signal: Entry candle
   • Confirm Resistance Level: Price breaks above, retests
   • Entry Conditions Met: Enter long
     • Stop Loss: Below recent swing low
     • Takeprofit: 2x risk

2. Short Position

   • Confirm Bearish Trend: Blue MA below red MA, area between colored red
   • Identify Pullback: Green line above red line, then below again
   • GLA Sell Signal: Entry candle
   • Confirm Resistance Level: Price rejected off multiple times
   • Entry Conditions Met: Enter short
     • Stop Loss: Above recent swing high
     • Takeprofit: 2x risk

Summary

• Usage: Quantifies and visualizes price variation in trends.
• Components: Assess market direction and strength.
• Platform: Trading View
• Combination: Use alongside other strategies for more robust trading decisions.
• Recommendation: Check it out and integrate it into personal trading systems.