Magic Trend Indicator

Magic Trend Indicator

Magic Trend Indicator may help identifying the correct trend direction.
It is plotted on the price chart, like any moving average, though it is faster, more accurate
and reliable than other trend following indicators.

The calculation of indicator is based on ATR, current price direction and some more complex
logic.

Magic Trend Indicator changes its color based on the direction of the trend, so if the line
is green then the trend is up and if it is red then the trend is down.
The value of Magic Trend indicator can be used as trend reversal trigger on closing basis.
If you are on long position and on any bar price closes below the indicator value then the
indicator turns red from the next bar to indicate the reversal of trend, so the trader can
exit his long position and take short position at the same time.
The opposite rules apply to the short positions.

A buy signal is also triggered when the closing price crosses above the Magic Trend line and
a short signal is triggered when the closing price crosses below the Magic Trend line.

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Risk disclosure:

No information on this site is investment advice or a solicitation to buy or sell any financial instrument. Past performance is not indicative of future results. Trading may expose you to risk of loss greater than your deposits and is only suitable for experienced investors who have sufficient financial means to bear such risk.

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  1. naluis • 290 days ago #

    what is the function of temp1? it is not taken into account in the calculation

  2. murre87 • 290 days ago #

    How can i use this in a strategy?

  3. robertogozzi • 290 days ago #

    It is well described above.
    To use it you can use CALL as with any other indicator.
    This is the instruction:
    myMagicTrend = CALL “Magic Trend”[20, 14, 1, 5]
    Parameters (you can change them as best suits you):
    20 is the CCI periods
    14 is the ATR periods
    1 is the ATR multiplier (can be a decimal number)
    5 is the periods of a Simple Moving Average.

  4. murre87 • 290 days ago #

    I Created a thread for this
    https://www.prorealcode.com/topic/magic-trend-strategy/

  5. murre87 • 290 days ago #

    Wich timeframe and index are used in your picture?

  6. Johann • 283 days ago #

    Hi Roberto, Thank you for the work but how do you get the indicator to change color from green to red and vice versa? Mine is one color only with no option to change it in the configuration window?

    • Lavallette • 253 days ago #

      Color and other drawing indicator settings can be changed easily if you select “Properties”.

    • robertogozzi • 253 days ago #

      If MagicTrend > MagicTrend[1] then it’s green, red otherwise.

  7. Lavallette • 253 days ago #

    Hello Roberto.
    Thanks for this interesting indicator.

    I wanted to try use it in an automatic system in 2 different ways.

    First depending on its state do not enter long or short. Example if green, do not short and if red do not enter long
    Second trigger signal when the color change from green to red or red to green.

    I must admit I failed in both ways.
    Could you please advice?
    Cheers.

  8. robertogozzi • 253 days ago #

    If MagicTrend > MagicTrend[1] then it’s green, red otherwise.

    • Lavallette • 250 days ago #

      Thank Roberto.
      I thought about that also but I would like to get only one signal. Only when the color change from green to red or red to green.
      If I do
      MagicTrend > MagicTrend[1]
      I will get several signals not only when the color change.

  9. robertogozzi • 250 days ago #

    (see below)

  10. robertogozzi • 250 days ago #

    If MagicTrend <> MagicTrend[1] then it’s Green or Red

    • raffa58 • 188 days ago #

      Buonasera Roberto, ho provato ad usare questo indicatore inserendo l’istruzione di cui sopra ” If MagicTrend > MagicTrend[1] then it’s green, red otherwise” ma ricevo un errore di sintassi . cosa sbaglio ? grazie

  11. Leo_da_Pisa • 163 days ago #

    A really nice indicator. Can easily be used as a strategy. I’ve tried a few trend indicators here but this one works perfectly for me.

    Thank you for sharing, Roberto.

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