we've all used trailing stops before they are some of the most classic types of indicators in the trading world and serve generally as excellent signal tools the problem with trailing stops is they can be faked out quite easily and tell you the market is changing direction when it's just a small retracement Now Fair Value gaps are a concept whereby imbalances are created in the market signaling a major Market move that has potential to Mark the start of a new trend although these are often filled in the future they can be massively useful to for analyzing
price action and reversals so that's why we at chart Prime decided to fuse these two concepts and create the gaps Trend the gaps trend is pretty simple firstly it will label fair value gaps on your chart this is standard and useful gaps are automatically displayed showing you where large volatile moves occurred in the market but what we do is we take those gaps and we generate a trailing stop out of them you'll notice a blue Trend suggests the market is moving upwards and the purple Trend suggests the market is moving in a downwards Trend but
how do we detect said trends when a new fair value Gap is produced the algorithm detects hey a really volatile move has occurred maybe the trend is changing the great thing about using this method is down to the way fair value gaps work a fair value Gap is of course a mark IM balance it suggests a move is so powerful that it shocked the market using this to detect fresh and new trends therefore has this Advantage it also allow allows us to filter out possible Market retracements that don't have a lot of oomph behind them
for example here the market was in a downtrend shown via the purple trailing stop and started to retrace upwards a little however a new fair value Gap was not formed the retracement was identified as weak and therefore the trading stop didn't flip to Blue this therefore allowed us to protect our gains and not immediately enter that long position when compared to other trailing stops this is a massive massive Advantage the trailing stop is also positions to account for the fair value gaps being filled in the near future further implementing measures to protect you from being
faked out for chart Prime premium users you of course have the trend assistant a powerful trailing level that follows the trend and is designed to protect itself against Market fake outs too for Traders that like to swing you can open the settings and increase the length this allows for less noise and allows you to follow longer term trends for Traders that prefer to scout a lower setting is more suited to catch those smaller mov moves users also are able to turn on the show Gap level in the settings to see these major market levels where
price May return in the future making them Fantastic Future entry and exit points using Trend following can be one of the most powerful and classical ways to analyze a market however implementing methods to protect yourself against retracements and fake outs is key so if you want to use this indicator 100% free search for gaps Trend and use this one by chart Prime and if you want more free indicators like this don't forget to join our Discord [Music]
