In this concise article, I explore the potential utility of the TMA Bands Overlay, a custom indicator on the TradingView platform. The interpretation I present leans towards trend following, but it can also be adapted for trend-reversal trading strategies. I specifically delve into how this indicator can be employed to generate signals in alignment with the prevailing trend.From a non-algorithmic graphical perspective, I examine the combination of two types of TMA (Trimmed Mean Average). The trend is discerned through the interaction of two moving averages of the TMAs. When the gray line surpasses the black line, indicating an upward trend, only bullish signals are considered. Conversely, when the gray line is below the black one, only bearish signals are taken into account.Buy and sell signals displayed on the chart are a product of the TMA Overlay.
Setup Strategy:
Time Frame: 15 minutes or higher, with a preference for higher time frames.
Currency Pairs: Any.
Platform: TradingView.
(Locate these indicators in indicators > Community Scripts on TradingView)
Trading Rules:
Trade exclusively in the direction of the trend.
Upward trend when the gray line > black line.
Downward trend when the gray line < black line.
Buy:
Trend is up + buy arrow.
Sell:
Trend is down + sell arrow.
Exit Position:
Place initial stop loss at the previous swing high/low.
Profit target at the opposite signal or when there is a reverse intersection of the gray line with the black one.
Examples of Trades:
This strategy, designed for a 15-minute or higher time frame, offers a clear framework for traders to follow trends and make informed decisions based on the signals generated by the TMA Bands Overlay. Traders may consider adapting the strategy to suit their risk tolerance and preferences.
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