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Blog: New Enhancement to Trend Line EA – Helps Spot Reversal Trades!

I have applied a small tweak to my trend line script whereby it now has the ability of detecting whether a currency has had X number of consecutive closes beyond it.

This has proved perhaps more beneficial in the lower time frames such as the hourly charts where price can close beyond a trend line and if the user has been strict on maintaining that once there is ONE close beyond the trend line to consider it broken (the trend line EA would then no longer keep plotting it).

An interesting example that I just stumbled upon when doing my weekly analysis was the CADCHF, have a look at how the new trend line performs:

CADCHF bounces at support off of long-term support zone

This supporting trend line has been in effect since the end of 2008 and yet has proved to be a good marker for the CADCHF:

CADCHF trend line since 2008 has been a solid support zone.

The enhancement of this feature is that it allows the trend line to continue to be plotted even when you have had many closes dotting above its life. This is perhaps more better seen in the lower time frames, such as the hourly charts. A recent reversal trade I spotted last night was on the NZDCHF as seen in this chart:

NZDCHF holds resistance as trend line remains active even though many closes dot above it.

Notice how the horizontal resistance line remained active even though we had a successful close beyond the trend line (as indicated by the first arrow). Due to the new enhancement of the trend line EA the trend line remains active and continues to show that this zone is problematic for the NZDCHF – which is confirms on Friday’s price action! (Confirmation is also somewhat similarly seen with the downward trending trend line too)

Anyway, hopefully this enhancement improves those who look for reversal points on the charts. Let me know how you go!

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About Louie Lewis

Louie Lewis
Successful forex trading starts with you first. Then comes the actual strategies and techniques. I have been involved with forex and forex trading for a few years now. It is a wonderful way to build wealth. The learning never stops and I want to help others along their journey into this wonderful market of opportunity.

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