Perfect Trend Line Indicator

Perfect Trend Line Indicator is a trend-following forex trading indicator based on Moving Averages. Its developers have focused more on its ease of use so that traders of all levels of experience can utilize it. This Indicator can be used for both scalping and day trading, making it suitable for all timeframe charts. Furthermore, it enables you to trade any forex currency pairs/assets you want in the financial markets.

Because the first version of this indicator was developed for the old MetaTrader 4 platform, the Perfect Trend Line Indicator for MT5 has many different names. The basic algorithm of this indicator is focused on the key difference between the periods’ highest and lowest points. This indicator’s signals take the form of a dynamic band that limits the price’s upward (bullish) and downward (bearish) movement.

What is the Perfect Trend Line Indicator?

The Perfect Trendline indicator is a straightforward indicator that indicates trend direction. It has two trend lines, one fast and one slow. The lines represent the BUY and SELL signals. This indicator plots points and trend lines on the chart. These points serve as both entry and exit points. The dots are two colors: red and green. A red dot indicates a sell signal, whereas a green dot indicates a buy signal. Traditional candles are also colored red and green by the indicator. Green denotes bullish momentum, while red denotes bearish momentum. The Perfect Trendline indicator leaves the candles when the market is in neutral.

The Perfect Trendline Indicator employs two MAs with different parameters: 3 FLMA and 7 SLMA. The bullish crossover of the market trend is represented by 3 FLMA moves above the 7 SLMA. In contrast, a move of the 3 FLMA below the 7 SLMA is regarded as a bearish market crossover.

Setting up the Perfect Trendline Indicator
Setting up the Perfect Trendline Indicator

Perfect Trend Line Strategy

The Perfect Trendline Strategy is one which is based on trend. On the chart, the Perfect Trendline indicator draws trendlines as well as up and down dots. The indicator indicates the general direction of the market using dots. Trendlines and dots confirm bearish and bullish momentum for BUY and SELL signals. To enter a long position, forex traders may endeavour to look for two things: the appearance of a green dot and the crossing of the green trendline over the red trendline. To open short positions, traders could look for the Red dot and the intersection of the Red trend line and the Green trend line. The appearance of the dots depicts the exit signal as well.

It’s worth noting that the price sometimes reverses course when green and red dots appear. This indicates a short-term trend reversal, but the long-term trend will remain bullish or bearish.

Buy Signal

The following could be your checklist for a buy trade:

  • When, by forming a bullish crossover, the 3 FLMA moves above the 7 SLMA.
  • When a green dot appears directly beneath the price bar.

Once these two events occur:

  • You could open a buy position after the bullish crossover happens and you get your signal confirmation.
  • You could set your stop loss just below the nearest swing low.
  • You could set your take profit at the nearest resistance zone or you could exit trade when a bearish crossover forms with a red dot at the top of the chart.
  • For good risk management, I would only consider trades with a risk to reward ratio of at least 1:2.
Perfect Trendline Indicator Buy Setup
Perfect Trendline Indicator Buy Setup

Sell Signal

The following could be your checklist for a sell trade:

  • When, by forming a bearish crossover, the 3 FLMA moves below the 7 SLMA.
  • When a red dot appears directly above the price bar.

Once these two events occur:

  • You could open a sell position after the bearish crossover happens and you get your signal confirmation.
  • You could set your stop loss just above the nearest swing high.
  • You could set your take profit at the nearest support zone or you could exit trade when a bullish crossover forms with a green dot at the bottom of the chart.
  • For good risk management, I would only consider trades with a risk to reward ratio of at least 1:2.
Perfect Trendline Indicator Sell Setup
Perfect Trendline Indicator Sell Setup

Perfect Trend Line Pros & Cons

Pros

  • Due to its ease of use, traders of all levels of experience can utilize this indicator.
  • The indicator tells the trader what the direction of the trend is, both on smaller and larger timeframes.

Cons

  • False signals tend to occur more frequently on smaller timeframes, though larger timeframes aren’t immune to false signals.
  • Due to the design and function of the indicator, it may not be suitable for a sideways market.

Conclusion

The Perfect Trendline Indicator uses trendlines and dots to represent BUY and SELL signals. It is a useful tool for traders that use trendlines and support and resistance levels. However, when paired with price action, the signals generated by the Perfect Trendline Indicator could receive extra confirmation while the trader pays attention to risk management before picking trades.