The Precision trend histogram is a simple MT4 indicator that tells about the trend’s direction. In the bottom window, the indicator displays a histogram underneath the chart. The histogram is made up of red and green bars. The color of the bars shows the direction of the trend. Traders can use the indicator on any timeframe.
What is the Precision Trend Histogram Indicator?
The Precision Trend Histogram Indicator is a basic histogram that shows Precision Trend indicator signals. The easiest way to use this indication is to establish the market’s overall trend direction. As a result, you could think of it as a filter rather than a signal provider. Precision Trend Histogram Indicator works with all timeframes and currency pairs. It appears in a separate window right below the main trading chart. The input tab allows you to change the default parameters directly. Feel free to play around with the settings and parameters to suit your needs.
Precision Trend Histogram Strategy
When using this strategy, traders may want to examine the color of the bars to seek for BUY and SELL indications. In a significant decline, the indicator displays red bars, allowing traders to enter short positions. When the indicator draws green bars, it suggests an uptrend and allows traders to enter long positions. The indicator can also be used by traders to identify market reversals. When the indicator begins to change colors, it suggests that the trend is going to finish and traders could exit their positions. It is crucial to remember that the indicator does not always indicate trend reversals, so traders may want to wait for price action to change direction before exiting contracts.
Buy Signal
This could be your checklist for a buy trade:
- When the indicator’s histogram bars turn green.
Once this event occurs:
- You could open a buy position after you confirm your entry with bullish candlestick patterns.
- 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 the histogram bars turn red.
- For good risk management, I would only consider trades with a risk to reward ratio of at least 1:2.
Sell Signal
This could be your checklist for a sell trade:
- When the indicator’s histogram bars turn red.
Once this event occurs:
- You could open a sell position after you confirm your entry with bearish candlestick patterns.
- 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 the histogram bars turn green.
- For good risk management, I would only consider trades with a risk to reward ratio of at least 1:2.
Precision Trend Histogram Pros & Cons
Pros
- The Precision Trend Histogram Indicator informs the traders on the direction of the prevailing trend.
- This indicator can also predict possible trend reversal zones so that traders can act accordingly.
Cons
- The color change of the histogram bars may sometimes mistake a trend correction for a trend reversal, and vice versa.
- This indicator may not be very suitable for a consolidating market on smaller timeframes.
Conclusion
The Precision Trend Histogram generates a histogram with red and green bars. Traders can take positions or exit trades by looking at the red and green bars. The Precision Trend Histogram indicator could be worth adding to your trading toolbox. Nonetheless, keep in mind the importance of maintaining realistic expectations. It, like any other technical analysis tool, is not capable of generating 100% correct indications. As a result, this forex indicator occasionally generates erroneous signals. Its performance will be highly variable depending on market conditions. You are free to create your own trading method based on it.
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