A trend indicator that identifies significant market moves by detecting trend bars with at least 50 pips change and analyzing subsequent reduced profit-taking periods.
Explore complementary indicator rolesHow it works
The indicator first identifies a trend bar by measuring the market change between opening and closing prices, requiring a minimum movement of 50 pips to indicate significant market liquidity. When this criterion is met, the trend bar is colored white to highlight its significance.
Following the trend bar identification, the indicator analyzes subsequent bars for reduced profit-taking by examining their price range. Bars with a range of 30 pips or less are colored grey, signaling potential trend continuation and reduced market volatility after the initial significant price movement.
Why it may be useful
This trend indicator helps traders identify potential market momentum and trend continuation by highlighting significant price movements and subsequent consolidation periods. By using specific pip-based criteria, it provides a systematic approach to detecting meaningful market shifts.
The signal is particularly valuable because it aligns with Dow Theory principles, which suggest that trends often feature periods of reduced profit-taking. This allows traders to recognize potential entry points and understand the market's underlying directional strength more effectively.
When to explore it
The indicator works best in markets with clear directional movements and sufficient liquidity, particularly for short to medium-term trading strategies. It is most effective in timeframes that allow for precise pip measurement and trend identification, such as intraday and day trading scenarios.
Traders should apply this signal in markets with consistent price movements, such as major currency pairs or highly liquid financial instruments. It is particularly useful when seeking to identify potential trend continuations after significant price changes and during periods of market consolidation.
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What we’ve verified
Access, alerts and repainting behaviour have not been independently verified for this indicator. Check the creator’s current publication and settings.
General descriptions and classifications are recovered research. Verified details above identify the specific checks we have completed. Check the creator’s current publication for later changes.
