High-Probability Entry and Exit Points Across All Market Conditions
Learning Objectives:
Understand the multi-factor analysis engine behind signal generation
Identify the four signal types (Strong, Weak, Reversal, Breakout)
Use dynamic stop loss and take profit levels
Apply two strategy modes (Buy and Hold vs Swing Trading)
Combine trend following with reversal indicators
Adapt signals to different timeframes and markets
Time: 75-90 minutes | Prerequisites: Market Structure, Momentum | Difficulty: Intermediate
Best For: Trend following, breakout trading, systematic entry/exit | Strategy Modes: Buy and Hold, Swing Trading
What is Trend Following Buy Sell Signals?
Trend Following Buy Sell Signals is a sophisticated trading tool that generates high-probability entry and exit points using advanced pattern recognition across different market conditions. It combines multiple technical factors into a single, clear signal system.
The Trend Following Philosophy
Core belief: The trend is your friend. Markets spend more time trending than reversing, so trading WITH the trend offers the highest probability of success.
Statistics:
Markets trend ~30-40% of the time
Range-bound ~40-50% of the time
In transition (reversing) ~10-20% of the time
Implication: Focus on the 30-40% of time when markets are trending. That's where the money is made.
The Entry/Exit Problem
What traders struggle with:
Entry timing: Too early (before trend confirms) or too late (after big move)
Exit timing: Getting out too early (missing profits) or too late (giving back gains)
Signal quality: Which setups are high vs low probability?
Risk management: Where to place stops and targets?
Traditional approach:
Moving average crossovers (lagging, often late)
Break of support/resistance (no confirmation)
"Gut feeling" (emotional, inconsistent)
Problems with traditional approach:
High false signal rate in choppy markets (40-50% losers)
No clear exit strategy
One-size-fits-all (doesn't adapt to market conditions)
No risk/reward guidance
What Trend Following Buy Sell Signals Does
Our approach:
Multi-Factor Analysis
Combines 5+ technical factors for each signal
Pivot points (structural turning points)
Moving averages (trend context)
Price action (momentum and patterns)
Momentum oscillators (strength)
Volatility measures (risk adjustment)
Four Signal Types
Strong signals: Highest probability, all factors aligned
Weak signals: Lower probability, partial alignment
Reversal signals: Trend change warnings
Breakout signals: New trend initiation
Adaptive Risk Management
Dynamic stop loss calculation (based on volatility)
Automatic take profit levels (based on structure)
Risk/reward optimization (minimum 2:1)
Position sizing guidance
Two Strategy Modes
Buy and Hold mode: For long-term positions, fewer signals
Swing Trading mode: For active traders, more signals
Result: Instead of "price crossed MA, maybe enter," you get "Strong buy signal with 5 factors aligned, enter at $145, stop at $140, target at $160 (3:1 R:R)."
[CHART EXAMPLE: Traditional MA cross vs Trend Following signal showing improved timing]
The Four Signal Types
Signal Type 1: Strong Signals (Highest Conviction)
What they mean: All major factors aligned in same direction. Highest probability setup.
When they appear:
Trend confirmed on multiple timeframes
Price at structural support (long) or resistance (short)
Momentum building in signal direction
Volume increasing
Multiple moving averages aligned
Volatility moderate (not extreme)
Visual: Large arrow (green for buy, red for sell) with "STRONG" label
Probability: 70-75% win rate with proper risk management
Position sizing: Can use larger position (still within 2% risk rule)
Best use: Primary trade signals, highest confidence entries
[CHART EXAMPLE: Strong buy signal with all factors annotated]
Signal Type 2: Weak Signals (Lower Conviction)
What they mean: Some factors aligned, but not all. Moderate probability setup.
When they appear:
Trend direction unclear or transitioning
Price in middle of range (not at key levels)
Momentum mixed signals
Volume average or below
Moving averages starting to align but not fully
Visual: Smaller arrow with "WEAK" label or lighter color
Probability: 55-60% win rate
Position sizing: Use smaller position or skip if other opportunities available
Best use: Secondary signals, take only if no better opportunities
[CHART EXAMPLE: Weak signal in choppy conditions]
Trading tip: Weak signals work better when combined with other confirmations (Smart MACD divergence, Price Momentum Reversal signal, etc.).
Signal Type 3: Reversal Signals (Trend Change Warning)
What they mean: Current trend may be ending, potential reversal starting.
When they appear:
Established trend showing signs of exhaustion
Price at extreme levels (overbought/oversold)
Momentum divergence detected
Volume decreasing on trend moves
Moving averages starting to flatten or cross
Visual: Different colored arrow (often orange/yellow) with "REVERSAL" label
Probability: 60-65% win rate (reversals are harder to catch than continuations)
Position sizing: Standard or smaller (reversals riskier than trend following)
Best use: Exit existing positions in opposite direction, or cautiously enter counter-trend trades
[CHART EXAMPLE: Reversal signal at trend exhaustion]
Trading tip: Reversal signals work best when combined with Price Momentum Reversal indicator for confirmation.
Signal Type 4: Breakout Signals (New Trend Initiation)
What they mean: Price breaking out of consolidation, new trend likely starting.
When they appear:
Price consolidating in range for extended period
Volatility contracting (Bollinger Bands squeezing)
Volume increasing as price approaches breakout level
Multiple timeframes showing breakout
Clear break above resistance (long) or below support (short)
Visual: Explosive arrow or special icon with "BREAKOUT" label
Probability: 65-70% win rate (breakouts with volume are reliable)
Position sizing: Can use larger position (breakouts often lead to significant moves)
Best use: Early entries into new trends, highest risk/reward potential
[CHART EXAMPLE: Breakout signal after consolidation]
Trading tip: Breakout signals require volume confirmation. Low-volume breakouts fail 70-80% of the time. Only trade breakouts with 50%+ above-average volume.
Multi-Factor Analysis Engine
Factor 1: Pivot Points (Structural Turning Points)
What they are: Key price levels where market has turned in the past.
How we use them:
Identify significant swing highs and lows
Generate support/resistance levels
Signal when price approaches these levels
Signal logic:
Price approaching pivot support + bullish factors = buy signal
Price approaching pivot resistance + bearish factors = sell signal
Why it matters: Pivot points represent zones where supply/demand shifts. High probability reaction zones.
[DIAGRAM: Pivot points and signal generation]
Factor 2: Moving Averages (Trend Context)
Which MAs we use:
20 EMA (short-term trend)
50 EMA (medium-term trend)
200 EMA (long-term trend)
How we use them:
Alignment: All MAs in same order = strong trend
Crossovers: Fast crossing slow = momentum shift
Support/resistance: Price respecting MAs = trend healthy
Signal logic:
Price above all MAs + other factors = strong buy
Price below all MAs + other factors = strong sell
MAs mixed = weak signal or no signal
[CHART EXAMPLE: MA alignment producing strong signal]
Factor 3: Price Action (Momentum and Patterns)
What we analyze:
Candlestick patterns (engulfing, hammers, etc.)
Higher highs/higher lows (bullish structure)
Lower highs/lower lows (bearish structure)
Consolidation patterns (flags, triangles)
Signal logic:
Bullish pattern + uptrend structure = buy signal
Bearish pattern + downtrend structure = sell signal
Consolidation breakout + volume = breakout signal
Factor 4: Momentum Oscillators (Strength)
Which oscillators:
RSI (Relative Strength Index)
Stochastic
Custom momentum calculations
How we use them:
Overbought/oversold conditions
Momentum building vs fading
Divergences (price vs momentum disagreement)
Signal logic:
Momentum confirming price direction = stronger signal
Momentum diverging from price = reversal signal
Momentum oversold in uptrend = buy on pullback
Factor 5: Volatility (Risk Adjustment)
What we measure:
ATR (Average True Range) for volatility
Bollinger Band width
Recent price range
How we use it:
Calculate appropriate stop distances
Determine if market conditions suit trading
Adjust signal sensitivity (higher volatility = fewer signals)
Signal logic:
Moderate volatility = normal signal generation
Extreme volatility = fewer signals (wait for calm)
Contracting volatility � expansion = breakout signal
[DIAGRAM: Multi-factor decision tree for signal generation]
Dynamic Risk Management
Automatic Stop Loss Calculation
How it works:
Stop placement based on recent volatility (ATR)
Positioned below structural support (long) or above resistance (short)
Adaptive: Widens in volatile markets, tightens in calm markets
Key feature: The indicator automatically calculates optimal stop placement using a proprietary algorithm that considers both market structure and current volatility conditions.
Example:
Long entry: $150
Recent swing low: $147
Indicator calculated stop: $147
Result: Stop placed at structural support level
Why it's better than fixed:
Adapts to market conditions
Accounts for normal price movement
Reduces premature stop-outs
[CHART EXAMPLE: Stop placement based on structure and ATR]
Automatic Take Profit Levels
How it works:
Target calculation based on risk/reward ratio (minimum 2:1)
Positioned at structural resistance (long) or support (short)
Multiple targets possible (scale out strategy)
Key feature: The indicator identifies optimal take profit levels that ensure positive risk/reward while targeting realistic price structure.
Example:
Long entry: $150
Stop: $147 (risk $3)
Indicator calculated target: $160 (next resistance)
Result: 3.3:1 risk/reward ratio
Why it's better:
Ensures positive expectancy
Targets realistic levels (structure)
Optimizes risk/reward
[CHART EXAMPLE: Entry, stop, and target levels visualized]
Two Strategy Modes
Mode 1: Buy and Hold
Purpose: Long-term position trading, capture major trends
Characteristics:
Fewer signals (only strongest setups)
Wider stops (accommodate larger moves)
Larger targets (hold for major trend)
Less active management required
Signal generation:
Strong signals only
Requires multiple timeframe alignment
Minimum 3:1 risk/reward
Best for:
Part-time traders
Retirement accounts
Lower transaction costs important
Less screen time
Typical holding period: Weeks to months
[CHART EXAMPLE: Buy and Hold signals on weekly chart]
Mode 2: Swing Trading
Purpose: Active trading, capture short-term price swings
Characteristics:
More signals (strong, weak, reversal, breakout)
Tighter stops (protect capital quickly)
Moderate targets (2:1 to 3:1)
Active management required
Signal generation:
All signal types
Single timeframe sufficient
Minimum 2:1 risk/reward
Best for:
Full-time or active part-time traders
Those who enjoy active trading
Can monitor positions regularly
Typical holding period: Days to weeks
[CHART EXAMPLE: Swing Trading signals on daily chart]
How to Choose
Choose Buy and Hold if:
You have limited time to monitor markets
You prefer fewer, higher-conviction trades
You want to minimize transaction costs
You can emotionally handle wider stops
Choose Swing Trading if:
You can actively monitor positions
You enjoy more frequent trading
You want faster feedback on trades
You prefer tighter risk control
Can you switch: Yes! Adjust in settings. Test both in paper trading to see which fits your personality.
Setup Guide
Step 1: Get the Indicator
Log in to TradeDots dashboard
Navigate to Indicators section
Find Trend Following Buy Sell Signals
Click Get TradingView Invite
Copy invite URL
Step 2: Add to TradingView
Open invite URL (logged into TradingView)
Click "Add to Favorites"
Confirm added
Step 3: Apply to Chart
Recommended first chart: SPY or QQQ, Daily timeframe
Open TradingView
Symbol: SPY
Timeframe: Daily
Indicators � Favorites � Trend Following Buy Sell Signals
What you'll see: Arrows on chart with labels (Strong, Weak, Reversal, Breakout), plus stop/target lines.
[SCREENSHOT: Trend Following applied to chart]
Step 4: Configure Strategy Mode
Click indicator name in legend
Click gear icon (settings)
Strategy Mode:
Select "Buy and Hold" or "Swing Trading"
Default: Swing Trading
Tip: Start with Swing Trading to see more signals and learn the indicator. Switch to Buy and Hold once comfortable.
Step 5: Additional Settings
Signal Sensitivity (Low/Medium/High):
Low: Fewer but higher quality signals (~70% win rate)
Medium (default): Balanced (~65% win rate)
High: More signals but some false positives (~60% win rate)
Show Stop/Target Lines (On/Off):
On: Visual lines showing stops and targets
Off: Cleaner chart, no risk management guidance
Alert Options:
Enable popup/sound/email alerts for signals
Configure in TradingView alert system
Trading the Signals
Trading Strategy 1: Strong Signals Only (Conservative)
Rules:
Trade only Strong signals
Confirm with higher timeframe trend
Enter at signal candle close or next open
Use provided stop and target levels
Hold until target or opposite strong signal
Probability: ~70-75% win rate
Example:
Strong buy signal: $200
Stop: $195
Target: $215
Hold until $215 or strong sell signal appears
[CHART EXAMPLE: Strong signal trade from entry to exit]
Trading Strategy 2: All Signals with Filtering (Moderate)
Rules:
Trade all signal types
Filter: Skip weak signals if not at key support/resistance
Prioritize strong and breakout signals
Use half position size for weak signals
Always respect stops
Probability: ~65-70% win rate (mixed signals)
Example:
Strong signals: Full position
Weak signals: Half position or skip
Reversal signals: Confirm with Price Momentum Reversal
Breakout signals: Confirm volume
Trading Strategy 3: Combination with Other Indicators (Advanced)
Rules:
Wait for Trend Following signal
Confirm with Smart MACD or Price Momentum Reversal
Check Chart Pattern & Market Structure for context
Only enter when 3+ factors align
Use position sizing based on conviction (more factors = larger size)
Probability: ~75-80% win rate (multiple confirmations)
Example:
Trend Following: Strong buy signal
Smart MACD: Bullish divergence
Chart Pattern: Price at ascending trendline
Result: 3 confirmations = high-conviction long
[CHART EXAMPLE: Multi-indicator confirmation setup]
Common Mistakes to Avoid
Mistake #1: Trading Weak Signals Without Context
Error: Taking every weak signal that appears Problem: Weak signals alone have only 55-60% win rate Fix: Only trade weak signals at key support/resistance or when combined with other confirmations
Mistake #2: Ignoring Strategy Mode
Error: Using Buy and Hold mode but trying to swing trade Problem: Signal frequency doesn't match trading style Fix: Match strategy mode to your trading style and timeframe
Mistake #3: Not Using Stops
Error: "I'll just wait for opposite signal" Problem: Can lead to large losses if market gaps or trends strongly Fix: Always use the provided stop loss. No exceptions.
Mistake #4: Exiting Too Early
Error: Taking profit before target because "it might reverse" Problem: Cuts winners short, ruins risk/reward ratio Fix: Trust the target levels. Let winners run to at least 2:1 R:R.
Mistake #5: Fighting Higher Timeframe Trend
Error: Taking counter-trend signals on lower timeframe Problem: Trading against major trend = low probability Fix: Always check daily chart before trading hourly signals
Real-World Example
[CHART EXAMPLE: Complete trade walkthrough]
Asset: AAPL (Daily Chart, Swing Trading Mode)
Setup:
Signal: Strong buy signal at $170
Context: Pullback in uptrend to 50 EMA
Factors aligned:
Pivot support at $168
All MAs bullish (20 > 50 > 200)
RSI bouncing from oversold
Volume increasing
Bullish hammer candle
Trade:
Entry: $171 (next day open)
Stop: $166 (risk $5)
Target: $181 (reward $10, R:R = 2:1)
Outcome:
Reached $182 in 8 trading days
Profit: $11/share
R:R: 2.2:1
Why it worked: Strong signal + trend pullback + all factors aligned
Key Takeaways
Multi-factor analysis combines 5+ technical factors for each signal Four signal types provide different conviction levels (Strong = best) Dynamic risk management automatically calculates stops and targets Two strategy modes adapt to different trading styles Best for trend following catch continuations, not just reversals Combine with other indicators for highest probability setups Always use stops even 70% win rate means 30% losers
Next Steps
Continue to: Chart Pattern & Market Structure to add structural context to your trend signals.
Or explore: Combining Indicators for complete multi-indicator systems.
Practice: Paper trade 30-50 signals before using real money. Track win rate by signal type.
Remember: Trend Following Buy Sell Signals is designed to catch trend continuations and breakouts the highest probability moves in markets. Focus on strong signals, respect stops, and let winners run to targets. The indicator does the analysis; your job is execution and risk management.