Trend Condition [TradersPro]

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OVERVIEW

The Trend Condition Indicator measures the strength of the bullish or bearish trend by using a ribbon pattern of exponential moving averages and scoring system. Trend cycles naturally expand and contract as a normal part of the cycle. It is the rhythm of the market. Perpetual expansion and contraction of trend.

As trend cycles develop the indicator shows a compression of the averages. These compression zones are key locations as trends typically expand from there. The expansion of trend can be up or down.

As the trend advances the ribbon effect of the indicator can be seen as each average expands with the price action. Once they have “fanned” the probability of the current trend slowing is high.

This can be used to recognize a powerful trend may be concluding. Traders can tighten stops, exit positions or utilize other prudent strategies.

CONCEPTS

Each line will display green if it is higher than the prior period and red if it is lower than the prior period. If the average is green it is considered bullish and will score one point in the bullish display. Red lines are considered bearish and will score one point in the bearish display.

The indicator can then be used at a quick glance to see the number of averages that are bullish and the number that are bearish.

A trader may use these on any tradable instrument. They can be helpful in stock portfolio management when used with an index like the S&P 500 to determine the strength of the current market trend. This may affect trade decisions like possession size, stop location and other risk factors.