The financial markets, for all their complexities, often exhibit a fundamental truth: trends occur. Prices are inclined to move in a sustained direction, upwards (bullish) or downwards (bearish). Trend following strategies capitalize on this by identifying these trends and aligning your trades accordingly.

The Trend Intensity Index (TTI) is a technical indicator specifically designed to help trend followers. It gauges the strength of the prevailing trend, providing priceless insights into whether a trend is more likely to proceed or lose momentum.

Consider the TTI as your personal trend meter. A powerful reading on the indicator suggests the trend has legs, while a weak reading might indicate the party’s winding down.

Understanding the Calculation of the TTI 1.3 Averages

Now, let’s peek under the hood and see how the TTI 1.3 Averages calculates its magic. This indicator utilizes an idea called moving averages (MAs). An MA smooths out price data by averaging prices over a particular period.

The TTI 1.3 Averages, because the name suggests, employs two moving averages: a “major” one and a “minor” one. The default settings typically use a 30-period and a 60-period easy moving average (SMA), but these might be customized based in your trading style (more on that later!).

The indicator then calculates a difference between these two MAs and applies a multiplier (1.3) to amplify the result. This final value is your TTI reading, typically displayed as a line in your trading chart.

In essence, the TTI 1.3 Averages compare short-term and long-term price movements to evaluate the trend’s strength.

Interpreting the TTI 1.3 Averages Indicator Readings

Understanding what your TTI reading means is crucial for making informed trading decisions. Here’s a breakdown of the overall interpretations:

• Values Above 50: This signals a bullish bias. The “major” moving average is higher than the “minor” one, indicating an upward trend with some endurance.
• Values Below 50: This means a bearish bias. The “major” moving average falls below the “minor” one, hinting at a possible downtrend or a weakening uptrend.
• The Gray Area: Market Indecision: When the TTI hovers around 50, the market is likely to be experiencing consolidation or indecision. Look ahead to price motion confirmation (discussed later) before taking motion.

Remember, the TTI is a trend strength gauge, not a crystal ball. While it provides priceless insights, it’s essential to contemplate other aspects like price motion and support/resistance levels before entering a trade.

Customizing the TTI 1.3 Averages for Individual Strategies

The fantastic thing about the TTI 1.3 Averages lies in its customizability. You’ll be able to tailor the indicator settings to match your trading timeframe and risk tolerance.

Here’s how you’ll be able to personalize your TTI:

• Choosing Appropriate Moving Average Periods: Experiment with different moving average lengths. Shorter periods (e.g., 10-day and 20-day) capture faster trends, while longer periods (e.g., 50-day and 200-day) reveal long-term trends. Select the timeframe that aligns together with your trading style (scalping, day trading, swing trading, etc.).
• Aligning Indicator Settings with Trading Timeframes: In the event you’re a day trader, shorter moving averages (e.g., 10 and 20) is likely to be more relevant. Conversely, a swing trader might profit from periods like 50 and 100.
• Tailoring the TTI to Specific Markets: Some markets are inherently more volatile than others. You may need to regulate the TTI settings for a more volatile market (e.g., using shorter MAs) to avoid getting whips

Leveraging the TTI 1.3 Averages for Entry and Exit Signals

Now you can interpret the TTI’s messages, let’s explore easy methods to translate them into actionable trading signals. Listed below are some common strategies:

• Utilizing Divergence Between Price and Indicator: Search for situations where the worth motion diverges from the TTI reading. For instance, if the worth keeps making recent highs however the TTI starts to say no, it would signal a weakening uptrend and a possible opportunity to exit a protracted position (and even initiate a brief position). Conversely, a rising TTI alongside stalling prices could indicate a bullish trend gaining momentum, hinting at a possible entry for long trades.
• Identifying Trend Resumption with Crossovers: The TTI may generate signals through crossovers. When the TTI line crosses above the 50 level, it would suggest a resumption of the uptrend, offering a possible long entry opportunity. Conversely, a crossover below 50 could signal a bearish takeover, prompting a brief entry or exit from long positions.
• Combining TTI with Other Technical Indicators: The TTI is a strong tool, but it surely shouldn’t be utilized in isolation. Consider incorporating it with other technical indicators like support/resistance levels, price motion patterns, or momentum oscillators for a more well-rounded trading strategy. This confluence of indicators can strengthen your conviction before entering a trade.

Remember, these are only just a few examples, and the perfect solution to discover effective trading signals is thru backtesting and paper trading. Experiment with different TTI settings and methods on historical data to see what works best for you and your risk tolerance.

Benefits & Limitations of the TTI 1.3 Averages

Like several technical indicator, the TTI 1.3 Averages has its own set of pros and cons:

Benefits

• Trend Strength Gauge: The TTI helps you assess the prevailing trend’s strength, providing priceless insights into its potential longevity.
• User-Friendly Interface: The TTI is a comparatively easy indicator to know and implement in your MT4 platform.
• Customizable: The flexibility to regulate moving average periods lets you tailor the TTI to your specific trading style and timeframe.

Limitations

• Lagging Indicator: The TTI, based on moving averages, is a lagging indicator. It reacts to past price movements, so signals might appear after the trend has already begun.
• Potential for False Signals: Market noise and volatility can sometimes generate misleading TTI signals. Combining it with other indicators helps mitigate this risk.
• Trade Bias: The TTI inherently has a directional bias (bullish above 50, bearish below 50). It won’t be ideal for identifying range-bound markets or for traders preferring a more neutral approach.

The way to Trade With The Trend Intensity Index 1.3 Averages

Buy Entry

1. TTI Crossover Above 50: Search for a situation where the TTI line crosses above the 50 level, ideally coinciding with a price breakout above a support level or a continuation of an uptrend.
2. Confirmation with Price Motion: Don’t rely solely on the TTI. Search for bullish price motion patterns like hammer candlesticks or ascending triangles to verify the uptrend signal.
3. Entry Point: Consider entering the trade barely above the breakout point or recent swing high, depending in your risk tolerance.
4. Stop-Loss: Place your stop-loss order below the recent swing low or support level to limit potential losses if the trend reverses.

Sell Entry

1. TTI Crossover Below 50: Search for a situation where the TTI line crosses below the 50 level, ideally coinciding with a price breakdown below a resistance level or a reversal of a downtrend.
2. Confirmation with Price Motion: All the time seek confirmation from bearish price motion patterns like head-and-shoulders or bearish engulfing candlesticks.
3. Entry Point: Consider entering the trade barely below the breakdown point or recent swing low, depending in your risk tolerance.
4. Stop-Loss: Place your stop-loss order above the recent swing high or resistance level to limit potential losses if the trend resumes upwards.
5. Take-Profit: Much like long positions, you’ll be able to utilize trailing stop-losses, goal profit levels, or volatility-based take-profit strategies.

Trend Intensity Index 1.3 Averages Settings

Conclusion

The Trend Intensity Index 1.3 Averages (TTI) equips you with priceless insights into the strength of prevailing trends. By understanding its calculations, interpretations, and potential applications, you’ll be able to transform the TTI into a strong tool for navigating the ever-changing market landscape. Remember, the TTI is a compass, not a crystal ball. Integrate it with other technical evaluation tools, fundamental evaluation, and sound risk management practices to refine your trading decisions. With dedication, practice, and a healthy dose of skepticism, the TTI can empower you to confidently conquer trends and unlock recent trading possibilities.

Really helpful MT4/MT5 Broker

XM Broker

• Free $50 To Start Trading Immediately! (Withdraw-able Profit)
• Deposit Bonus as much as $5,000
• Unlimited Loyalty Program
• Award Winning Forex Broker
• Additional Exclusive Bonuses Throughout The Yr
• Exclusive 50% Money Rebates for all Trades!

>> Sign Up for XM Broker Account here with Exclusive 50% Money Rebates For All Future Trades [Use This Special Invitation Link]  <<

Already an XM client but missing out on cashback? Open Recent Real Account and Enter this Partner Code: 𝟕𝐖𝟑𝐉𝐐

(Free MT4 Indicators Download)

Trend Intensity Index 1.3 Averages MT4 Indicator