The Automatic Trend Lines MT4 indicator draws the most interesting support and resistance trend lines on the Metatrader 4 chart for any currency pair and time frame.
Trading trend lines isn’t difficult to understand.
- Go long above the upper red resistance trend line
- Go short below the lower magenta support trend line
For the best chance of a successful trade, trade broken trend lines in the direction of the overall trend and avoid trading against the trend (often it’s a fake breakout).
Overall trend up? Trade a break of the red upper resistance trend line and ignore the magenta lower support trend line.
Overall trend down? Trade a break of the magenta lower support trend line and ignore the red upper resistance trend line.
Free Download
Download the “automatic-trendlines.mq4” MT4 indicator
Indicator Chart (EUR/USD D1)
The EUR/USD Daily chart below displays the Automatic Trend Lines Metatrader 4 Forex indicator in action.
Basic Trading Signals
Signals from the Automatic Trend Lines MT4 forex indicator are easy to interpret and go as follows:
Buy Signal: Open buy trade when price crosses and closes above the upper trend line (resistance). The overall currency trend must be up.
Sell Signal: Open sell trade when price crosses and closes below the lower trend line (support). The overall currency trend must be down.
Trade Exit: Use your own method of trade exit.
Automatic Trend Lines + Heiken Ashi Bollinger Bands Smoothed MT4 Strategy
This strategy uses the Automatic Trend Lines MT4 indicator to define dynamic support and resistance via red resistance lines and magenta support lines.
It combines this with the Heiken Ashi Bollinger Bands Smoothed MT4 indicator which colors candles blue for bullish momentum and red for bearish momentum.
Trades are taken when price breaks or respects trend line zones and the Heiken Ashi candles confirm momentum.
This setup works on M15 and H1 charts and is suitable for swing or short term traders.
Buy Entry Rules
- Price closes above the upper red resistance trend line drawn by the Automatic Trend Lines indicator.
- Heiken Ashi Bollinger Bands Smoothed shows a sequence of blue candles confirming bullish momentum.
- Wait for a retest: after the breakout, price comes back toward the red line now acting as support and holds above it with blue candles.
- Enter long on a blue Heiken Ashi candle closing above or near the support trend line.
- Place a stop loss just below the red line support or a few pips under the most recent swing low.
- Take profit at the next resistance or use a fixed reward to risk ratio, or trail the stop while candles stay blue and price remains above support.
Sell Entry Rules
- Price closes below the lower magenta support trend line.
- Heiken Ashi Bollinger Bands Smoothed shows a series of red candles confirming bearish momentum.
- Wait for a retest: after the break, price retraces toward the broken support now acting as resistance and stays below it with red candles.
- Enter short on a red Heiken Ashi candle closing below or near the resistance trend line.
- Set stop loss just above the magenta line or above the recent swing high.
- Take profit at the next support or use a fixed reward to risk ratio, or trail stop while candles remain red and trend line resistance holds.
Advantages
- Automatic trend lines provide clear support and resistance zones.
- Heiken Ashi candles smooth price action and help identify momentum easily.
- Combining support/resistance and momentum reduces false signals in sideways markets.
- Suitable for M15 and H1 charts allowing flexibility for traders.
Drawbacks
- Strong trends without retracements may lead to missed entries.
- Requires patience for breakout, retest, and confirmation leading to fewer trades.
Example Case Study 1 (GBPUSD H1 bullish breakout)
On GBPUSD H1, price had been consolidating under a descending red resistance trend line.
Price closed above the red line at 1.2650, signaling a breakout.
The Heiken Ashi Bollinger Bands Smoothed indicator showed a sequence of blue candles.
Price retraced to 1.2635, touched the former resistance, and formed two blue candles.
A long trade was entered at 1.2640. Stop loss was placed at 1.2600, 40 pips below.
Price moved up to 1.2730 before showing signs of reversal, gaining 90 pips.
The red trend line held as support and candles remained blue during the move.
Example Case Study 2 (AUDJPY M15 bearish breakdown)
On AUDJPY M15, price closed below the lower magenta support trend line at 94.20, signaling a breakdown.
The Heiken Ashi Bollinger Bands Smoothed chart showed a series of red candles.
Price retraced to 94.55, testing the broken support, and red candles persisted.
A short trade was entered at 94.50. Stop loss was set at 94.80, 30 pips above.
Price dropped to 93.85, capturing 65 pips profit.
The lower trend line acted as resistance and red candles confirmed downward momentum.
Strategy Tips
- Focus on breakouts that occur during the most active trading sessions for the chosen currency pair to increase the probability of sustained moves.
- Confirm that the breakout candle closes fully above resistance or below support before entering to reduce false signals.
- Combine with the higher time frame trend direction to align trades with the overall market bias.
- Monitor candle size and momentum: small or indecisive candles after a breakout may indicate weakness and a possible reversal.
- Consider using a partial position at initial entry and adding to the trade as momentum confirms the move.
- Use support and resistance from nearby swing highs and lows as additional targets or stop adjustments.
- Do not enter trades if the breakout occurs right at the start of the trading session when liquidity may be low.
- Keep an eye on price action near major psychological levels to avoid getting caught in reversals.
- Track the duration of the breakout trend: prolonged trends without pullbacks may require adjusting targets or trailing stops more aggressively.
Download Now
Download the “automatic-trendlines.mq4” Metatrader 4 indicator
MT4 Indicator Characteristics
Currency pairs: Any
Platform: Metatrader 4
Type: Chart pattern indicator
Customization options: Variable (nPeriod, Limit) Colors, width & Style.
Time frames: 1-Minute, 5-Minutes, 15-Minutes, 30-Minutes, 1-Hour, 4-Hours, 1-Day, 1-Week, 1-Month
Type: trend lines
