The Ultimate Trend Indicator is a powerful MetaTrader 4 (MT4) indicator designed to help traders identify trend strength and potential reversal points in the forex and stock markets. Developed by Ultimatefxtools, this indicator combines multiple technical analysis techniques to generate clear buy and sell signals.

How the Ultimate Trend Strength Finder Works

The indicator uses a combination of Ichimoku, Exponential Moving Averages (EMA), Linear Weighted Moving Averages (LWMA), and overbought/oversold (OB/OS) detection to determine trend strength. Here’s a breakdown of its core components:

1. Price Smoothing with EMA

• The indicator applies an EMA (Exponential Moving Average) to smooth price data.

• The default EMA period is 32, but traders can adjust this setting.

• The EMA helps filter out market noise and highlights the underlying trend.

2. Overbought/Oversold Detection

• The indicator calculates deviations from the EMA to detect overbought and oversold conditions.

• A 25-period OB/OS detection helps identify potential reversal zones.

3. Trend Strength Measurement

• The LWMA (Linear Weighted Moving Average) is applied to the OB/OS values to measure trend momentum.

• The default LWMA period is 6, providing a responsive trend strength reading.

4. Dynamic Trend Levels

• The indicator plots two dynamic levels:

  • Upper Level (Bullish Trend) – When price breaks above this level, it signals strong bullish momentum.

  • Lower Level (Bearish Trend) – When price breaks below this level, it signals strong bearish momentum.