TREND ANALYZER BASICS
Experience taught us that one shouldn’t trade against the trend, and it’s widely known that trading in favor of the trend increases your odds.
So we offer you several ways to detect trends to best fit your strategy and trading style.
The concept is simple but there are dozens of ways of calculating moving averages and these have pretty much infinite parameters that can be used to precisely tune them. The best? Hard to tell.
But we will offer a proprietary trend analyzer, an MA blend good for scalping and spotting trend reversals and a classic fully customizable MA crossing.
Spectro offers you 8 different types of the most popular moving averages for the custom mode, from Simple Moving Averages to Fractal Moving Averages – so that creates 64 basic trend analyzer options. You can change the lookback (length) period, time frame resolution, and more. Resulting in a very flexible, simple to use and powerful trend analyzer with endless customization options.
- Trend Analyzer
Those are the 3 types of trend analyzers you can choose from. Scalping mode is a lot more reactive but it’s amazing finding crucial reversal moments. My technique is based entirely on price and it takes no consideration time, removing a lot of noise and it’s perfect for longer day trades or swings. Also, we have a custom mode that will exceed your needs to deploy your own settings.
- Use Current Timeframe Resolution?
This option allows you to see different time frame trends on your chart, so let’s say you are trading a 4H chart and you want to see the Daily or Weekly trends or maybe you are scalping at 15MIN and you want to see what the 4H trend is telling you – this option will speed up your trading and it will severely increase your profitability if used correctly.
- Timeframe Resolution
This option only works if you left the “Use current timeframe resolution” unchecked, so here you can choose what resolution you want to use instead of the timeframe your chart uses – it goes from 1 MINUTE to 1 WEEK. Usually, you use a higher resolution (bigger trend), i.e. Use D on a 4H chart or use 4H in a 30min chart.
- Moving Average Lookback Period
*This only works if you choose the CUSTOM MA CROSS MODE* How many bars back are considered in the average, the bigger the number, the less responsive the MA becomes.
- Moving Average Type
*This only works if you choose the CUSTOM MA CROSS MODE* Each MA has its own way of being calculated, all of these options are widely used and if you want to understand in-depth how they work you can easily find their formulas on Google. The best way to see what works best is to play with the numbers around and visually watch if it’s going the best fits your needs.
This mode requires a LOT of past data to work since it’s not time-based, it’s priced based. So if the asset doesn’t have a lot of past information you might see some blank data. Therefore in larger timeframes, you might experience no data on older periods. If that happens it means the asset doesn’t have enough data for processing.
A very useful mode for scalping, intraday, day trading or even swings to an extent. It excels in forecasting big price changes, look at the orange areas.
This mode also does work well on longer time frames but its precision for scalping is pretty good.
- Light Green means a strong uptrend
- Dark Green means a small correction within the uptrend if it comes after a green zone, otherwise, it’s a reversal.
- Red means a strong downtrend
- Orange means a small correction within the downtrend if it comes after a red zone, otherwise, it’s a reversal.
- The blue zones are the big reversal areas. In a quick look at the example chart, it has a precision of 9 out of 11.
CUSTOM MA CROSSING
This is for the users who have their own preferences and their own settings to analyze trends – that’s why we offered a few of the most popular MAs for you.
All of them can be easily found on your charting software, including Tradingview if you want to visually analyze the MA’s behavior individually.
Thank you for reading.