Flow Trend
Last updated
Last updated
This custom indicator is designed to efficiently identify and follow market trends while avoiding false reversals. It dynamically adjusts to market volatility, ensuring that it stays on the right side of the trend without reacting prematurely to minor market fluctuations.
The indicator displays percentage-based strength at key turning points (triangles), indicating the power of bullish or bearish momentum.
During a trend, a histogram can be toggled to show the relative strength of bulls and bears power in real time, providing a deeper understanding of the market's driving forces.
With options for fast, mid, and slow settings, the indicator can capture trends across different timeframes, from short-term swings to long-term movements.
The indicator maintains its position relative to the price during strong trends, avoiding early exits or incorrect signals. This allows traders to ride trends effectively until they weaken.
The primary purpose of the indicator is to identify the direction of a trend using the adaptive bands that react to volatility. As long as the price remains on one side of the band, the trend is intact.
The triangles that appear on the chart mark potential turning points, with a percentage indicating the strength of the signal. Higher percentages suggest a stronger possibility of a trend change and it continuation.
Real-Time Trend Monitoring: During a trend, the histogram provides insights into the balance of bull and bear power. It’s especially helpful for spotting early signs of weakening trends.
Trend Continuation or Reversal: A strong trend will generally have minimal opposing pressure in the histogram (e.g., low bear power during an uptrend). When opposing power (bear in an uptrend or bull in a downtrend) starts increasing, this is often a sign that the current trend is losing steam and could reverse or at least consolidate.
Bear Power During Uptrend: As an uptrend progresses, if you see an increase in bear power on the histogram, it indicates that sellers are gradually gaining strength. While this doesn’t necessarily mean the trend will reverse immediately, it signals that the bullish trend is weakening, and you should stay cautious. This could be an early sign that an uptrend is losing momentum and may reverse soon.
Bull Power During Downtrend: Similarly, during a downtrend, if the histogram shows increasing bull power, it suggests that buyers are stepping in and the bearish trend may be weakening. This could indicate an opportunity to prepare for a possible trend reversal.
Imagine you’re in an uptrend and the histogram starts to show a gradual rise in bear power.
This doesn’t necessarily signal an immediate exit, but it does suggest you should be vigilant for further signs of weakening, like reduced volume or a breakdown in key price levels. If bear power continues to rise while the price starts moving toward or below the band, it could be a good time to consider exiting your position or tightening your stop losses.
Similarly, in a downtrend, rising bull power on the histogram signals that the bearish momentum is weakening.
By combining the indicator's trend-following capabilities with real-time histogram analysis, you can better time your entries and exits while staying aligned with the broader trend. This makes it an invaluable tool for swing trading, position trading, or even scalping, depending on how you adjust the settings.
