Hello everyone, today I decided to talk about indicators filters, but before proceeding to their direct description, I consider it necessary to make a small introduction. You probably already know that there are no completely win-win trading strategies, sooner or later losses may occur. If you open trades for all signals of only one strategy, then your total profit will be slightly reduced. In order to avoid unnecessary losses, experienced traders use filter indicators, which we will talk about today.

What are indicators filters

The word filter means the performance of certain actions, the main purpose of which is to filter out false signals.

Now I suggest you consider the most common types of filters:

1. Indicators. Experienced traders, as a rule, use several indicators at once in trading, where some act as main signals, while others act as filters for false signals. Many trading strategies that are effective work exactly according to this principle.
2. Time filters. These filters are most often applied at the time, since time plays one of the main roles in such trading.
3. Candlestick and graphical analysis. It's about looking for a certain figure, which is a harbinger of a certain price movement.
4. Combined. Such filters take into account several factors such as time and indicators.

In indicator trading, almost any instrument can act as a filter indicator, the choice of which should be done depending on the main one.

Popular indicators filters

Filter indicators are not always intended solely for filtering out false signals; they can also be used as basic tools in the same way. For a clearer understanding, I suggest that you consider the usual moving average as an example. Despite its simplicity, it is often used as an addition to the main trading strategy, namely to determine the general trend in the market. If the main indicator offers to open a sell trade and the price is above the moving average, then it is recommended to ignore such a signal and vice versa.
Various oscillators can also be classified as effective filter indicators. The well-known Stochastic is perfect for these purposes, showing oversold and overbought zones. So, for example, if the main strategy gives a signal to sell, and the stochastic is in the oversold zone, then such a signal should be treated with caution.

Various indicators built into MT4 are also used as filters. So, for example, it does not display overbought and oversold zones, but it allows you to identify a strong trend. Yellow indicates a strong trend, while red and yellow indicate a flat.

Universal indicators filters

It is impossible to talk about all indicators and filters in one article, since there are a lot of them. I will try to tell you about the most effective and common filter indicators. I call these tools universal, as they will suit almost any trading strategy.

Moving averages are the most popular and very effective. They are often used as support and resistance levels, as well as to determine the prevailing trend in the market. The period of moving averages is determined depending on the time interval used.

Also, to create profitable trades, it is necessary to take into account the time of occurrence of important news messages. This is especially important in situations where you decide to use small time periods and several at the same time. To make it easier to follow the release of important news messages, specialized filter indicators have been created that display all the necessary information in a specialized window on the trading chart. These algorithms are especially useful if you trade multiple working pairs and don't have time to follow the news yourself.

Creating a trading system using filter indicators

Most of the experienced traders in the process of trading prefer to use not only indicators, but also tools for performing graphical analysis. How exactly this is done, it is best to consider on specific example.

Let's say a trader is going to create an order in the direction of the mainstream right after the correction process is completed. Fibonacci levels, as well as the method of graphical construction, can be used as the main signal source. Indicators in this case will play the role of auxiliary tools. To create effective rules for entering the market, it is necessary to decide whole line tasks:

1. Determine if a trend is currently present in the market, as well as pinpoint its direction.
2. Provide Fibonacci levels with a filter indicator that can confirm the end of the correction, as well as the rebound of the price level.

In order to cope with the first task, you can use Forex filters such as moving averages and ADX, and you can use Stochastic to confirm the end of the correction as accurately as possible.

Bidding must be carried out in the following way:

1. Identify the presence of a trend in the market and determine its direction.
2. At the next stage, it is necessary to stretch the Fibonacci levels for a strong movement, which will be the last one.
3. Near the important levels (61.8% and 38.2%), it is necessary to carefully monitor the movement of the price level, as well as the data of the Stochastic indicator.

In order to open a trade to sell the currency, you should wait for the moment when the price level, after a jump up, rushes down from an important level, ADX also moves down and the Stochastic algorithm curves crossed in the overbought area. In order to open an order to buy a currency, the situation on the market must be mirrored. For a more accurate entry into the market, it is best to monitor the situation on smaller time periods.

It's no secret that trading on financial markets starts with the development trading system. At the same time, traders use both their own developments and those of others, which are being finalized to suit their own needs.

But any trading system gives a lot of signals for opening deals, both true and false. Therefore, they are processed forex filters. Today I propose to consider such filters in more detail.

The conditions of a trading strategy are a set of certain rules, in the presence of which actions are performed by a trader. These may include: opening or closing orders, or take profit, etc. What will the trader use filters on Forex?

“Most importantly, these algorithms help eliminate false signals provided by the trading system. »

By excluding such strategy errors from trading, we will protect ourselves from losses, or significantly reduce the number of negative results. The next positive aspect of using filters in Forex is the optimization of the trading system itself.

Forex filter categories

All filters used by traders to sort signals on the Forex market can be divided into several varieties (categories).

To the first category include filters that are based on the use of Forex technical indicators. Here, to filter false signals, various technical indicators are used, which can be included in the standard set of the MetaTrader terminal or installed separately. Usually in such a trading system it is used to receive signals, the second part of the indicators is used to filter out false signals.

For the second category Forex filters are used, which are based on the use of graphical analysis. Such filters, like trading systems, are very popular among traders lately. The essence of applying these filters is that when a certain combination of bars or candles appears on the chart, we expect confirmation of the signals by subsequent bars or candles.

next category forex filters can be classified as temporary. The simplest example of a time filter in Forex is checking the truth or falsity of signals with time. That is, when a definite signal appears, it is simply worth waiting for some time, and then it will be clear whether this is a false signal. Of course, this is just one example of such filters. The disadvantage of such a filter is the time itself - the wait can drag on and turn into a waste of time.

There is another category worth mentioning.- these are mixed or combined Forex filters, which may include a combination of instruments of various categories. In my opinion, these are the most effective "cleaners" on the market. Forex market, which allow you to leave for work situations with a high probability of a positive outcome.

Let's now look at examples of applying filters in trading on financial markets.

Indicator filter Trend Filter

The technical indicator belongs to the varieties of oscillators and is designed to determine the trend and movements in the market.

You can download it here:

The indicator is located in a separate window and is a line that changes direction and color when the trend direction changes. If the line of the instrument is colored green, then there is an uptrend on the market, or a flat movement with this trend.

The yellow color of the line indicates either a change in trend or a state of uncertainty. When the line is colored red, then the market is in a downtrend or flat.

The Trend Filter indicator is very effective in determining the direction of a trend. It allows you to eliminate various market noises and false signals. The developers do not recommend using it as the main indicator of the trading system.

But if you use Trend Filter to reject doubtful situations, it will be most effective for the trading system. For example, if we have a sell signal and the indicator line is in the green zone, then it makes sense to ignore such a signal and wait for the trend to change.

Forex Filters for False Breakouts

Another important, in my opinion, example of the use of protective algorithms in the Forex market is the identification of false breakouts of key support and resistance levels. As you know, these boundaries play an important role in the analysis of price movement. currency pairs.

Traders often wonder if a breakout of these levels can be considered a serious intention of the market to move on, or such a breakout is only aimed at misleading market participants? Let's look at options for filtering false breakouts of important price levels.

The easiest way to determine whether a price breakout is realistic is to move the price above or below the price level. If the price, after breaking through an important level, passes only 15-20 points, and then returns to this level, then with a high degree of probability we can talk about a false breakout.

Analyzing the history of price movement, it can be noted that for major currency pairs, a movement of 20-30 points after a breakout of the price level is not a true breakdown, and for cross-currency pairs, the limit of false breakouts can reach up to 70 points with volatile price movements.

On the example, we can observe a false breakout of the resistance level for the USDCAD currency pair. The price, having broken through the important level of 1.3165, went up to 1.3187, and then returned back. The breakthrough of an important level turned out to be false, after which a downtrend began.

So let's sum up our review.

“Forex filters are not an independent trading strategy, do not forget about it. This is just one of the tools for determining the realism of signals. »

But the use of such filters in the Forex market will help reduce the percentage of losing trades and get more accurate trading system signals.

It is also important to note that the older the timeframe used for trading, the better false signals will be filtered out. That is, the most effective use of forex filters will be in medium-term and long-term trading.

Forex flat filter indicators in our DailyFX forex webinar series our 1st webinar focuses on building a simple strategy using strength oscillator, support/resistance levels, positive risk/reward ratio and risk calculator. This lesson usually ends up with a lot of questions from traders trying to find a bigger edge by putting together more tools than those provided, which is a good thing. It's great to experiment and test different ideas.

However, the problem I have is that many traders try to use tools without fully knowing the strengths and weaknesses of the tools; often group similar indicators together or leave out an important set of tools that might be worth considering. So today I have broken down 3 tools known as "filters" - forex flat filter indicators - that can be used in different types of strategies.

Forex flat filter indicators

We have all heard the saying “the trend is your friend” or “trade the path of least resistance”. These phrases are used by traders who want to trade in the same direction as the overall trend. But what if we find it difficult to determine the trend? What should we do if we are not sure about
shifting our direction?

A great tool to add to a trend-based strategy is the 200-period simple moving average. By averaging the closing price over the last 200 bars, we can see if the current price action is above or below the average.

Learn Forex: 200 Period Simple Moving Average.

Any time we see price above the 200 period moving average line, we should look for buying opportunities. Every time we see price below the moving average line, we should look for selling opportunities. This ensures that we are trading in the same direction as the prevailing trend.

We can also take into account the strength of the existing trend by how far the price has moved from the 200-period moving average. The further the price is from the average, the stronger the trend. This can be seen in the chart above. A strong downtrend followed by a more tame uptrend.

To soften the trading range during these transitional periods, we can use a technical indicator called the Average Directional Index or ADX. ADX is not a direction filter. This is a filter that tells us if the currency pair is trending and we are not. The higher the ADX, the stronger the up or down trend. The lower the ADX, the more the currency pair moves sideways.

The chart below shows a period of time when the price trended and then changed to a range. The key level for ADX is 25. When ADX is below 25, we should focus on trading range strategies. Any value above 25 is not suitable for range trading and may be suitable for trend trading if the ADX moves high enough.

By eliminating our range trades when the ADX is above 25, we are more likely to make a profit.

Filtering any other strategy. The last filter on my list is the Universal Speculative Sentiment Index, or SSI. SSI tells us the ratio of buyers and sellers of each major pair. We want to use SSI when looking for trading opportunities against the retail crowd. So when most people are buying, we should be looking for sales, and vice versa.

For more information on using SSI, read My Favorite Trader Tool, How to use SSI. Learn Forex: a chart showing the feedback between price and SSI

Fine tuning with filters. I hope this article has given you ideas on how to improve your own strategy, whether you are trading trends, ranges, or something else entirely. If you'd like to test any of these filters risk-free, download a free demo account today with free charting and real-time price data. Happy trading!

Flat filter indicator

The MT4 flat filter indicator is based on a filtered moving average. The indicator displays the trend after the filtered signals directly on the chart, and its signals are very easy to understand and trade. The trend filter for Metatrader 4 draws a colored line in a separate MT4 window. The green lines show that the trend is up and it is time to open a buy position.

The red lines show that the trend is down and it is time to open a sell position. Yellow lines indicate that the trend is range bound or flat and we are waiting for a new trend direction, we will stick to the current trading position. The default period for the MA period filter is set to 9, but this value can be configured.
Scalpers, day and swing traders can take advantage of this forex indicator as well.

The main trading signals are as follows:

• The signals from the Trend Filter Forex MT4 indicator are easy to interpret and look like this;
• Buy signal: Open a buy position when the indicator draws a green line (bullish trend);
• Sell ​​signal: open a sell position when the indicator draws a red line (bearish trend);
• No signal: yellow line, stick to current buy/sell position;
• Trade Exit: Close an open trade when the opposite signal appears, or use your own trade exit method.

Flat filter

It is often said that a flat is a "killer" for trend traders' deposits. It really is. If your trading system performs well in the event of a strong trend in the market, it will not perform well in the event of a flat market.

Experienced traders who use the flat filter know that after a sideways movement, the price often moves in a trend. A long-term flat can be used as a signal for a further uptrend, although this is not always the case.

The flat period is a period of uncertainty when it is difficult to make any predictions. When the price moves in a narrow range without a directional move, it is almost impossible to determine the direction of the future movement.

Trend and flat. A trend is a directional price movement. There is a bullish trend - in the financial markets, this is an increase in asset prices. This trend is associated with a bull that tosses prey on its horns. There is also a bearish trend when the price of an asset falls.

This trend is associated with a bear that swings its prey from top to bottom. A trader should always consider the current trend and trade according to it. In the case of an uptrend, the trader should buy, in the case of a downtrend, the trader should sell.

The trend is a trader's friend. Lateral movement is also called flat. I define flat as a sideways trend. It helps to understand reversal patterns in Forex. Price action can not only change from an uptrend to a downtrend, but it can also go sideways!

This is a fact that is often overlooked by many traders who are losing money. Flat in Forex is a period of time when the strength of bulls and bears are equal, which makes it difficult to form a certain trend; therefore, the price does not have a definite trend and moves in a certain price range. Flat is a trap for inexperienced traders.

Methods for determining market conditions. I use three methods for determining the state of the market: indicator, graphic and session. Let's take a closer look at them.

Volume indicators can be used to confirm an apartment. Usually during the apartment period they show lower values ​​than at other times. However, if the trading channel has a wide range, the trader should use some other tools to determine the market conditions.

The indicator is based on the theory of financial time series, which represent fractal time functions.

Using the indicator in trading:

1. If the indicator is less than 0.5, it shows a trend. A low value indicates that the trend is weakening or that a correction may begin;
2. If the indicator is greater than 0.5, it shows a flat. A very high value indicates the development of a trend;
3. If the indicator is around 0.5, it shows uncertainty, in which case it is better not to trade.

The iVAR indicator can be used as an additional signal confirming the signals of other indicators. It shows the formation of a trend, but does not show the direction of movement.

An alternative possibility is to trade inside the channel, but you must take into account that the distance from the upper to the lower lines must be large enough.

Sometimes the shape of a candle helps determine market conditions. If the candle body is unusually short and the hue is very long, this indicates that neither buyers nor sellers have an advantage in the market.

Session method for determining an apartment. This method is especially useful for intraday trading. Forex trading is available 24 hours a day, but in reality a trading day consists of several trading sessions.

This method is based on considering each trading session separately; as a rule, after a period of price consolidation, the price begins to move strongly in any direction.

If during one trading session the price was in a flat, then during the next session the price may move in a trend, and vice versa.

The figure above shows the main trading sessions and a five-minute chart of the EUR/USD currency pair.

The meaning of the symbols on the chart:

• Ao — opening of the Asian session;
• Lo - opening of the London session;
• New York - opening of the New York and American sessions;
• Lx - closing of the London and European sessions.

In area 1, which is the Asian trading session, the price moves in a narrow channel (about 30 pips); With the opening of the London session (area 2), the price moves in a strong trend.

The activity of various trading instruments varies during trading sessions. For example, the volatility of major currency pairs increases significantly after the opening of the London and US markets.

Remember! The trader should study well all the information about the indicators he/she is going to use to determine the market conditions; Indicators are used only as additional market analysis tools.

If you are using the graphical flat detection method, don't forget to look at the higher timeframes. Different time frames may show different market conditions.

Consider important macroeconomic statistics and economic news, as they influence the direction of movement.

Try not to trade flat as it can be very risky.

Once again I welcome you to the pages of our blog! Today we will analyze a very, very important topic of signal filtering. This topic will be especially important for trend speculators. I explain why, any trend system faces the problem of interpreting signals in the flat, in order to filter out the signals that form in the sideways, traders use various filters to determine the flat. Based on this, we have prepared for you the best interpretations of filters for determining flat zones.

For each tool presented, we will give our own tips and recommendations. We will analyze in detail how to use each of the tools, as well as draw your attention to some of the nuances that appear when working with almost any indicator.

Flat filter indicator Trend&Flat (Download )

First on our list is an indicator for identifying the three market conditions, down, up, and flat. This tool is displayed in the basement window of the Metatrader bar chart. The principle of its operation is quite simple, if the market is in an uptrend, then the histogram of the indicator is painted in a green dotted line. If the market is in a downtrend, then a red dotted line is formed on the histogram. If the market is flat, then in the basement window you will see a gray solid bar.

I think everything is simple and understandable here, in the case of a flat, we don’t trade, we work with the trend, we wait until the price reaches a strong level or line and open an order, remember once and for all, each transaction should be based on something, levels are excellent zones, for which it is profitable to hide your stops.

Flat and Trend indicator

The best flat filter PulseFlat (Download )

The second indicator in our review for determining a flat of a histogram type. This tool builds a histogram based on the McDuck principle. The instrument is displayed in the basement window of MetaTrader.

It is quite easy to work with the indicator readings, if you see bright red bars on the chart, this indicates that a strong “bearish” impulse has begun. If you see the growth of blue bars, it means that the momentum is now ascending.

Pay attention to the weakening of the momentum, if the momentum becomes weaker, then the color of the tool changes to a dimmer color, depending on whether the histogram is above or below zero. And of course, the green dots tell us that the market is flat now and the price is squeezed in a narrow corridor.

Flat detection indicator PulseFlat

iVAR flat filter (download )

This tool works on the principle of calculating the variational index, which is made up of the dimension of the fractal derivative. All values ​​are displayed as a line in the basement window, the line has borders from 0 to 1. Signals will be given to us by a curved line that rotates around the central level 0.5. Let's take a closer look at what signals this analytical tool can give.

Signal variations iVar indicator:

1. If the basement line is below the level of 0.5, then we interpret this signal as a trend signal
2. If the line approaches 0, it means that the trend is coming to an end.
3. If the basement curve is above the 0.5 mark, it is considered that the market is flat or flat.
4. If the curve is trading around the 1 mark, this tells us that there is a high probability of a strong trend developing.
5. In case the curve is trading around the 0.5 level, this means that the market does not know where to go.

That's all the interpretation of the indicator, which determines the flat and trend zones. The advantage of this tool is that the tool can show the end of the trend and its weakening.

Ivar flat tool

Forex flat filter. Xaser indicator (download )

This tool is also a basement indicator and lays out all its readings for analysis at the bottom of the bar chart in the form of a moving curve. After we drop the tool on the chart, you will see a curve that either rises or falls, in fact - this indicator indicates the entry point after the flat. If the curve is pressed to the bottom of the basement instrument, then the market is flat, as soon as the curve begins to move upward, this means that you can enter into a deal.

The developer also notes that after the signal, when the curve reaches its top and starts to fall down, this will mean that the trend is ending or weakening, in which case it would be logical to exit the transaction.

Xaser indicator

Flat indicator MA SquizeMA Ed (download )

This analytical tool differs from the above, its difference is that it shows flat and trend zones not in the bottom of the chart, all readings of the tools are visually available on the price chart itself, some traders like it, and some like clean charts, so we specifically made selection so that you can choose exactly “your” tool for filtering signals.

The algorithm for calculating the signal was developed on the basis of the legendary and already familiar moving averages, but with an emphasis on the calculation of moving averages with a more pronounced emphasis on flat areas. After installing the tool on the chart, you will see two main moving averages of red and blue, which indicate the direction of the trend. In the case of a flat section, two more moving averages appear, but already yellow, and it is they who tell us that there are no large movements in the market and the price is trading sideways.

You can also use flat moving averages as a flat price corridor, it will be very convenient for fans of flat trading, since in such cases it is beneficial to open orders from the channel boundaries.

MA SquizeMA Ed flat and trend indicator

Legendary filter Alligator

The last indicator in our review will be the Alligator indicator. The peculiarity of this tool is that it does not need to be downloaded and it is installed in almost every terminal of both MetaTrader and other terminals, very often it can be found even in browser terminals, which makes this tool universal for trading on any platform.

In general, the topic of the Alligator is quite wide, the not unknown Bill Williams wrote a book about trading on this instrument, we advise you to read the book, as there you will find a huge amount of the most useful advice. Bill suggests using the instrument in conjunction with fractals and the Awesome Oscillator, which is also a standard instrument of the MetaTrader terminal.

In order to interpret the flat on the chart, it is necessary to wait for the moving averages to intertwine, if the line width grows, this may tell us that there is a strong trend movement in the market

Alligator as a flat detection tool

Summing up

Above, we presented you with an excellent collection of indicators for signal filtering. We strongly recommend not to trade on one instrument, but to use filter indicators in your work, which very well determine what stage of trading is currently on the market. In addition, I would like to note the trading sessions, the Asian session is considered a flat time, while the European and American trading sessions are considered highly volatile and trend movements most often occur during the trading of America and Europe.

The Trend Filter indicator is a high-quality filter that helps to quickly determine the current market situation. Of course, you can try to draw a simple visual market analysis, but in terms of objectivity, it will be ineffective.

The use of Trend Filter, which uses a special algorithm in its work, allows you to constantly analyze the market and receive objective data.

Description and settings of the Trend Filter indicator

Everyone knows that there are a large number of ways to determine the market condition, but the use of the Trend Filter filter indicator is one of the most effective methods at the moment.

We note right away that this indicator, as its description shows, is another one, but Trend Filter differs from them in that the main task of this algorithm, is a trend and flat display without a specific definition. In general, we can safely say that the Trend Filter indicator is a trend algorithm, which has all the main features of this group.

Having carefully studied the description of Trend Filter, we see that setting the indicator to trading terminal is produced as standard, so we will not dwell on this issue in detail. The indicator is placed in a separate window - at the bottom of the main field of the price chart.

In the indicator window after installation, you will observe the only line that, during the operation of the algorithm, can change its color to green - an uptrend, red - a downtrend, yellow - a state of uncertainty.

Now consider the description of the settings, which in the Trend Filter indicator are quite simple, since they consist of only two main parameters:

• Nbars - defines the period;
• MA_Period - defines the period.

Nbars is directly responsible for the period of the indicator itself, and the higher it is, the less sensitive it becomes to the market movement. Ma_period is a parameter responsible for the period of the moving average that smooths out the indicator readings.

For example, it makes sense to reduce the period of the indicator, so you will make it more sensitive to market movements and will receive more signals. It should be noted that quantity affects quality.

Regarding the advantages of the algorithm, the main one is the absence of redraws after the candle is closed. That is, if the Trend Filter algorithm has determined any direction, then it is completely sure of it.

As noted above, the main task of the Trend Filter indicator is to identify the trend, so let's start the description of the application this algorithm from these signals.

• when the indicator line turns green, open a long position;
• when the line is colored red - sell;
• when painted yellow - refrain from making deals.

This kind of approach seems really logical, but there is a small problem. The fact is that users of the Trend Filter indicator cannot independently set the boundaries of the indicator scale, after crossing which the indicator line will change color.

Of course, in the tab " Levels» This parameter is configurable, but it does not affect the result. You can verify this by looking at the figure below.

We can see that the buy signals were also late, and because of this, a potentially profitable trade turned out to be a loss.

Therefore, experienced users of this algorithm recommend not linking Trend Filter signals to specific colors, but focusing on indicator levels.

So good results can be obtained using the following strategy scheme:

- the purchase is made after the indicator line crosses the level -0.5 from the bottom up. The deal is closed according to the standard - the functional value closes below 0.95;

— we make sales after the indicator line crosses the level 0.5 from top to bottom. We close the deal when the color of the indicator line changes from red to yellow.

We see that the quality of the Trend Filter signals has improved significantly, but still the entry points were formed late, when the rollback had already managed to "eat" a certain part of the profit.

This problem is solved by combining two Trend Filter indicators with different parameters.

According to the indications of one (base) we will enter the trade, and according to the signals of the second (with a shorter period), we will exit the position.

We note right away that indicator periods, like timeframes, must be optimized for each of the traded instruments.

Do not forget about the smoothing function, the value of which depends on the nature of the traded instrument.

So, the more noise on the instrument, the longer the period of the moving average should be. In general, it all depends on what trading strategy is used by the user of this algorithm. Below we propose to consider one of the options for such strategies.

Trading strategy based on the Trend Filter indicator

So, we already know that the Trend Filter indicator shows traders the presence of a flat or a trend in the market, and if there is a second trend, also its direction. This is the basis of the trading strategy we are considering using the Trend Filter.

As you know, the higher the time interval used in trading, the more reliable it will be, therefore this trading strategy provides for work on the H4 chart. As a traded instrument, we will use a pair of currencies EUR/USD.

Trend Filter indicator, set up as follows:

• Nbars (50),
• Ma_period(9)
• and set the levels 0.899, -0.899.

Entry conditions according to the strategy based on the Trend Filter indicator

Buy deals are opened when Trend Filter is below the -0.9 level for more than 7 candles in a row, draws a red line, and then draws a blue segment, having risen above the -0.9 mark. We enter the market on the next candle. StopLoss is set at a distance of 30 to 60 points behind the nearest local minimum.

When the profit reaches 30 points, you can transfer the deal to breakeven and close 50% of the open position. When the profit reaches 50 points, we start the rest of the transaction volume at the Trailing Stop 50 points long.

We will open sell deals when the Trend Filter, being above the 0.9 level for more than 7 candles in a row, draws a green line, and then draws a blue segment, falling below the 0.9 mark. We enter the market again on the next candle.

Set StopLoss distance from 30 to 60 points behind the nearest local maximum. Exiting a sell trade is done in the same way as in a buy trade, but in a mirror image.

You should take into account some features that this trading strategy involves using the Trend Filter indicator:

• you can not trade at the time when they exit;
• you can’t trade when the Trend Filter indicator signal appears on candles with excessively large bodies;
• it is necessary to close positions if Trend Filter returns back to the flat zone.

Overview of the Trend Filter indicator