Free Forex Indicators (MT4), Trend Following Indicators

Hodrick-Prescott Channel

Hodrick-Prescott Channel is a price action channel-based trend-following forex trading indicator. Since the statical/horizontal support/resistances do not work all the time, this indicator has brought a customized dynamic price channel for determining a better accuracy in trade placements.

Hodrick-Prescott Channel also assists with defining the market trends that add an extra confluence to your trade decisions. However, it is a short-term trading indicator and works better when applied on shorter timeframe charts.

Hodrick-Prescott Channel Overview

Download the indicator and install it on your MT4 terminal. Once you’re done, your chart will transform like the following image:

Hodrick-Prescott Channel Overview

Hodrick-Prescott Channel Explanation

Hodrick-Prescott Channel calculates las 21-day period of price data for determining its trendline called “21-HP Trend” that works mostly like a Moving Average.

Hodrick-Prescott Channel Explanation

Price moves above 21-HP signals for the bullish trend of the market. On the other hand, price dives below the 21-HP level represent the bearish market trend.

Its VHP Channels accumulates the changes in price actions and automatically plots the channels promoting the support and resistance levels of the market. Buying for the support and selling for the resistance within the trend direction is the key rule of its application.

Also Read: Exness Broker Review

Hodrick-Prescott: Buy Conditions

Hodrick-Prescott Buy Conditions
  • Price moves above 21-HP Trend curve
  • A bullish candle forms right above the lower VHP channel
  • Buy triggers at the break of the respective bullish candle’s high
  • Set stop loss below the low of the lower VHP channel
  • Exit long/take profit whenever price hits the upper VHP channel and starts to move downwards

Hodrick-Prescott: Sell Conditions

Hodrick-Prescott Sell Conditions
  • Price moves below 21-HP Trend curve
  • A bearish candle forms right below the upper VHP channel
  • Sell triggers at the break of the respective bearish candle’s low
  • Set stop loss above the high of the upper VHP channel
  • Exit short/take profit whenever price hits the lower VHP channel and starts to move upwards

I have been actively trading the financial markets since April 2012. Besides trading with my personal money I am a technical analyst in a mutual fund that has Rs. 1 billion in assets under management. At my leisure, I love attending live music, traveling, and partying with friends.

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About Trend Following System

Trend Following System's goal is to share as many Forex trading systems, strategies as possible to the retail traders so that you can make real money.

Risk Warning: Trading in the forex market is very risky. Thus, it is may not be for everyone. A highly leveraged position can work against the trader when the trade does not work as expected. Trading in the forex market can cause to lose a significant portion of the capital or all of the capital. It is crucial to learn about the trading and gain enough experience in the demo account before trading with real money. The trading strategies published on this website do not guarantee profit as the market is dynamic and unpredictable. The past performance of a strategy is not the indicative of future performance. Trend Following System will not accept any kind of liability or damage caused by trading the strategies published on this website.
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