Just as the name suggests this indicator is based mainly on market trends. It draws several trend lines on the trading chart. The indicator is somehow complex and thus not suitable for Forex beginners. It should be used for traders that knows how to analyze and come up with correct judgments of the market trends. This indicator is just a tool to help in determining the trend direction.
WATL Trend Lines Indicator is completely not suited for the scalpers. It is suited for long term traders. The trends that are depicted by the trend lines. In actual fact the indicator should be used mainly with the H4 and above timeframes. If it is used with timeframes that are tighter for example H1 and below, it will not be very effective and thus profiting. However this indicator is for use with all currency pairs. There are no specific currencies that are chosen for this indicator.
Fig.1. The WATL trend lines indicator inserted on a USDJY chart.
Just as evident from the above chart, the indicator displays or is responsible for the formation of yellow trend lines, brown trend lines, red dotted line and a purple trend line. The indicator also gives an alert. The alert is given when top maximum and the bottom minimum are generated by the help of the trend lines. The bottom minimum and top maximum points are distinguished in the chart with a circle that is golden at the center and red on the edges. These two points are of great importance since the show the origin from where the trends are measured from.
If you can’t make clear judgment using this indicator alone, then it would only be wise to use it in conjunction with another indicator especially those that seek after the market trends.
How to trade using the WATL trend lines indicator.
There are three things that a trader should be looking at when using this indicator. First is the red dotted trend line. Then there are the bottom minimum and top maximum points. Lastly there is the purple trend line. These three are the things to use when trading.
When the bottom minimum point is given the trader should place a buy. At this time the market prices are set to rise. The issue come with when to close the trade. On the other hand when the top maximum point is given the trader should place a sell since the market prices are anticipated to drop.
Fig.2. WATL Trend Lines Indicator An example of placing sell and buy orders.
The trades should be given when the opposite signal is given. That is if you had placed a sell due to the formation of the top maximum point and all of a sudden a bottom minimum point is formed then you should close your sell and open a buy at that moment. The same applies for a buy order.
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