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Indicator that is good in trend trading

Most trend traders do not use any technical indicators and rely purely on price action. Some try to follow support and resistance levels. I believe that following price action is the best strategy ever, but you can also try to use one indicator with a special strategy to apply it. That indicator is RSI and the method to apply it in a trend is look for hidden divergences. 

Standard divergence in an indicator is simply a discrepancy between price action and indicator action. When you have an up trend and a dip what you can see is price displaying higher lows and lower lows in indicator. That is hidden divergence and a sign that it is a good opportunity to search for entering back into trend. You could seek for some confirmation on smaller time frames (15 or even 5 minute time frames).

You can look at the example in Australian dollar to see what I have in mind by what I have just written. So, when you see a trend in progress do not look for a counter trend move and join it when it happens. Look for opportunities to jump in to trend again when a counter trend move is over. RSI is just one indicator that you can use in hidden divergences. The same trading strategy can be used with MACD or any other popular indicator that is usually used in ranges to determine overbought and oversold levels (standard divergence).

If you want to define exact level for entry a crossover of moving averages could be applied. So, when a correction is over (let’s say you are wait to get into an uptrend) you look for a faster moving average (let’s say 21) crossing a slower moving average (let’s say 50) from below up. If that happens on 15 minute or 30 minute chart, this is a signal for you to enter the move in the direction of the trend.

Another way is to wait for a reversal pattern in price (it can be 123 reversal pattern) or a bullish candle or any other method that you enjoy using for getting back into a trade. I hope you see what I mean by trading hidden divergences to trade in the direction of a trend. There is a video which I would recommend to watch if you want to see how to enter into long term trends. It is called silver. Good luck.