Definition
The trend strength indicator is an MT4 indicator that shows the weak and strong trend areas on the price chart in red and green arrows. It also shows the percentage of the strength of the uptrend and downtrend.
Most beginner retail traders find it challenging to analyze the strength of the market’s trend. So, in this case, the trend strength indicator is the perfect indicator to find the price trend strength.
How does the trend strength indicator work?
The backend of the TSI indicator is the momentum of the market. It identifies the market momentum and then plots the trend strength in the form of red and green arrows.
- The higher the price momentum, the higher the percentage of trend strength will be
- Lower the price momentum, and low percentage of trend strength will be
Price momentum in trading means how fast the price moves in a specific time interval. In the ranging market conditions, momentum will be lower, while momentum will be higher in the trending market.
This indicator will help traders in making good decisions.
Trend strength indicator strategy
Here are the simple criteria to identify when to open or hold a trade.
Open a buy trade
When the trend strength indicator plots five arrows of green color then you should open a buy trade using your trading strategy.
Open a sell trade
When the trend strength indicator plots five red arrows, you should open a sell trade.
You should keep in mind that this is not a buy or sell indicator. It only helps make the right decision, like when to open a buy/sell trade or hold a specific trade to get maximum risk reward. You should always use your trading strategy with this trend strength indicator.
Conclusion
A trader should always take help from indicators. I will not suggest entirely relying on mathematical indicators, but you should take help from these indicators.
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