About the Trend Direction Indicator
The Trend Direction Forex indicator for Metatrader 4 is a complete trading system that comes with accurate buy and sell arrows.
The indicator appears in the main MT4 chart window in the form of buy and sell arrows connected with a blue dotted line.
Buy & sell signals:
- A green arrow is a buy signal.
- A red arrow is a sell signal.
Free Download
Download the “direction-indicator.ex4” indicator for MT4
Key Features
- Displays green arrows for buy signals and red arrows for sell signals.
- Works seamlessly across all timeframes and currency pairs.
- Non-repainting; signals remain valid after the bar closes.
- Compatible with scalping, day trading, and swing trading strategies.
- Easy to install and configure within the MetaTrader 4 platform.
Indicator Example Chart (EUR/USD H1)
Below is an example chart showcasing the Trend Direction Forex Indicator in action on the EUR/USD H1 timeframe.
The green arrows indicate potential buy opportunities, while the red arrows suggest potential sell opportunities.
Traders can use these signals to align their trades with the prevailing market trend.
The Zero Lag Trend Direction MT4 Strategy
This strategy combines the Trend Direction Forex Indicator with the Zero Lag MACD Indicator to create a dynamic and efficient trading system.
The Trend Direction indicator serves as a crucial filter, giving you a clear, overall view of the market’s trend.
The Zero Lag MACD acts as the entry trigger, providing a fast and precise signal that is free from the standard lag of a traditional MACD.
By using these two indicators together, you can ensure that your trades are in the direction of the main trend while getting a timely entry.
The strategy is highly versatile and works on any currency pair.
It is particularly effective on time frames from M15 to H1, making it a solid system for both scalping and day trading.
Buy Entry Rules
- The Trend Direction indicator displays a bullish signal (e.g., a green arrow).
- The Zero Lag MACD indicator’s main line crosses above the signal line, confirming bullish momentum.
- Stop Loss: Place it below the most recent swing low.
- Take Profit: Exit the trade when the Zero Lag MACD main line crosses back below its signal line, or when the Trend Direction indicator changes to a bearish signal.
Sell Entry Rules
- The Trend Direction indicator displays a bearish signal (e.g., a red arrow).
- The Zero Lag MACD indicator’s main line crosses below the signal line, confirming bearish momentum.
- Stop Loss: Place it above the most recent swing high.
- Take Profit: Exit the trade when the Zero Lag MACD main line crosses back above its signal line, or when the Trend Direction indicator changes to a bullish signal.
Advantages
- Dual Confirmation: This strategy uses a two-step confirmation process. The Trend Direction indicator filters out sideways market conditions, and the Zero Lag MACD provides a timely, precise entry.
- Reduced Lag: The Zero Lag MACD is more responsive than the standard MACD, allowing for earlier entries and a better chance of capturing more of a price move.
- Clarity: The signals from both indicators are visually clear and easy to interpret, making the system simple to follow for traders of all experience levels.
Drawbacks
- Whipsaws: Like all trend-following strategies, this system may struggle during periods of low volatility or sideways markets, which can lead to false signals and small losses.
- Signal Delay: While the Zero Lag MACD is faster, it is still a lagging indicator. You may still enter a trade after some of the initial momentum has passed.
Case Studies
Case Study 1: Buy Trade
On an M30 chart for CHF/JPY, the Trend Direction indicator showed a green arrow, signaling an uptrend.
The Zero Lag MACD was below the zero line, but then its main line crossed above the signal line, confirming a momentum shift to the upside.
A buy trade was entered.
The price continued its upward movement, and the trade was successfully closed for a solid profit when the Zero Lag MACD main line crossed back down below the signal line.
Case Study 2: Sell Trade
On an H1 chart for GBP/USD, the Trend Direction indicator was red, showing a strong downtrend.
The Zero Lag MACD main line crossed below its signal line, giving a sell signal.
A sell trade was initiated with a stop loss placed above the recent swing high.
The price dropped sharply over the next few hours, and the trade was exited for a significant profit when the Trend Direction indicator changed from red to green, signaling a potential trend reversal.
Strategy Tips
- Confirm the Trend: Always ensure the Trend Direction indicator is clearly showing a strong, defined trend. Avoid trading when the line is flat or moving sideways.
- Risk Management: Always use a stop loss to protect your trading capital. The most recent swing high or low is a good place to start.
- Test on a Demo Account: Before risking real money, backtest and forward-test this strategy on a demo account to get a feel for how it works on your chosen currency pairs and time frames.
- Trade with Discipline: Stick to your rules. Do not enter a trade if both indicators are not in clear agreement. Patience is key to making this system work.
Download Now
Download the “direction-indicator.ex4” indicator for Metatrader 4
Indicator Specifications
| Specification | Detail |
|---|---|
| Platform | MetaTrader 4 (MT4) |
| Timeframes | All Timeframes |
| Markets | Forex, CFDs, Indices, Commodities, Cryptocurrencies |
| Signal Type | Buy/Sell Arrows |
| Repainting | No |
| Inputs | Adjustable parameters for customization |
FAQ — Practical Questions Traders Ask
1. Can I use this indicator for scalping?
Yes, the Trend Direction Indicator is suitable for scalping, especially on lower timeframes like M1 or M5.
However, it’s essential to combine it with other tools or indicators to confirm signals and manage risk effectively.
2. Does the indicator repaint?
No, the Trend Direction Indicator does not repaint.
Once a signal is generated and the bar closes, the signal remains fixed and will not change.
3. Which other indicators work well with this one?
Combining the Trend Direction Indicator with tools like Moving Averages, RSI, or MACD can enhance signal accuracy and help filter out false signals.
4. How can I improve trade accuracy?
Consider trading in the direction of the higher timeframe trend.
For instance, if the H1 chart shows a buy signal, check the H4 chart to ensure the broader trend aligns.
Summary
The Trend Direction Forex Indicator for MT4 is a user-friendly tool that offers clear buy and sell signals, making it suitable for traders of all experience levels.
By combining it with other technical analysis tools and maintaining disciplined risk management practices, traders can enhance their trading strategies and improve overall performance.
