Introduction to the Trigger Lines Indicator
Moving average crossovers are some of the most basic trading strategies that new traders use. However, most newbies end up blindly using moving average crossovers that produce lagging trade signals. The Trigger Lines Indicator is an indicator that uses highly responsive moving average lines with minimized lag for its moving average crossover pair.
What is the Trigger Lines Indicator?
The Trigger Lines Indicator is a trend following technical indicator based on moving average lines. It plots two moving average lines that are characteristically very responsive yet also have smoothening effect to it.
The color of the two moving average lines change to indicate the current trend direction. It plots blue line to indicate an upward trend and a red line to indicate a downward trend.
How the Trigger Lines Indicator Works?
The Trigger Lines Indicator uses the Least Squares Moving Average (LSMA) method in computing for the two moving average lines. This is the method that makes the moving average lines characteristically very smooth and responsive. It also simply adds a shift on the second LSMA line which makes it seem even smoother and responsive in producing short-term trend reversal signals.
How to use the Trigger Lines Indicator for MT4
The Trigger Lines Indicator has two variables which can be adjusted within its indicator settings to control the sensitivity of the two lines.
The “Rperiod” and “LSMA_Period” both adjust the number of periods used at different parts of the indicator’s formula. Both these variables can be used to tweak the sensitivity of the moving average lines.
The Trigger Lines Indicator uses a very responsive short-term moving average line pair. As such, this indicator can be used as a trend reversal signal indicator. However, these signals are best used in confluence with the trend or in confluence with a reversal from a support or resistance area.
Buy Trade Setup
When to Enter?
Identify an uptrend market with swing highs and swing lows that are consistently rising. Wait for a pullback to cause the Trigger Lines to temporarily change to red. Open a buy order as soon as the Trigger Lines change back to blue. Set the stop loss on the support below the entry candle.
When to Exit?
Close the trade as soon as price action shows signs of a bearish reversal.
Sell Trade Setup
When to Enter?
Identify a downtrend market with swing highs and swing lows that are consistently dropping. Wait for a pullback to cause the Trigger Lines to temporarily change to blue. Open a sell order as soon as the Trigger Lines change back to red. Set the stop loss on the resistance above the entry candle.
When to Exit?
Close the trade as soon as price action shows signs of a bullish reversal.
Conclusion
The Trigger Lines Indicator is an excellent short-term trend and momentum reversal indicator. It can easily be incorporated as an entry trigger within a trading system. However, just as with most moving average lines, this indicator should not be used in a choppy market which is in a tight range.
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