"Confidence of Trend 02/17/2026"How it works:
Positive values (green columns or line): Bullish trend with confidence level
Negative values (red columns or line): Bearish trend with confidence level
Magnitude (0-100): How strong the trend confidence is
Reference lines: Help you quickly identify strength levels (strong = above ±50, moderate = ±30)
This is a standalone indicator that shows pure trend confidence without any price predictions.
How good is it?
The Confidence of Trend indicator is solid for what it does — it combines multiple reliable indicators (EMA, RSI, MACD) into one metric. Here are the strengths and limitations:
Strengths:
The indicator filters out noise by requiring multiple indicators to agree before showing high confidence. This reduces false signals compared to using single indicators. It adapts to different market conditions through weighted scoring rather than rigid rules. The visual representation (columns going positive/negative with magnitude) makes it intuitive to read at a glance. It's lag-resistant because it uses real-time RSI and MACD instead of just slow-moving averages.
Limitations:
Like all technical indicators, it can produce false signals during choppy, ranging markets where price moves sideways. During strong momentum reversals, it may lag briefly because the EMAs take time to catch up. It doesn't account for support/resistance levels, volume, or market structure. It works best on higher timeframes (4H+) where signals are more reliable; on 1M or 5M charts, false signals increase.
Trading Strategies:
Strategy 1: Confidence Breakout Trading
Watch for the confidence line to cross above +50 (strong bullish) or below -50 (strong bearish). This represents multiple indicators aligning powerfully. Enter a trade in that direction when confidence breaks into strong territory. Exit when confidence drops below ±30 or shows a reversal crossover. This works well on 4H and daily timeframes.
Strategy 2: Confidence-Momentum Confluence
Use the Confidence indicator as your trend filter, then combine it with price action. Only take long trades when confidence is positive (bullish), and only take short trades when confidence is negative (bearish). Use other entry signals (support/resistance bounces, candlestick patterns, or your original prediction candles) to time exact entries. This reduces trading against the trend.
Strategy 3: Mean Reversion Within Trend
When confidence is very high (above 70), the trend is extremely strong. Wait for a pullback where confidence drops temporarily below its current level, then re-enter in the direction of the main trend. This catches momentum continuation rather than fighting strong moves.
Strategy 4: Divergence Trading
Watch for divergence between price and confidence. If price makes a higher high but confidence makes a lower high, it suggests the trend is weakening even though price looks strong. This can signal an upcoming reversal. Conversely, price making lower lows while confidence increases suggests strong downtrend continuation.
Strategy 5: Range-Bound Filter
In ranging markets, the confidence line oscillates around zero but rarely reaches extreme levels. Avoid trading when confidence stays between -20 and +20 — this indicates indecision. Only trade when it breaks clearly into stronger territory.
Best Practices:
Use on 4H, daily, or weekly timeframes for most reliable signals
Combine with support/resistance levels for confirmation
Use as a trend filter rather than a standalone entry signal
Avoid trading when confidence is weak (between -30 and +30)
Watch for confidence divergence with price as a reversal warning
Paper trade first to validate on your specific markets
Example Setup:
Long only when confidence > +50, use daily candle closes above key support as entries. Exit when confidence drops below +20 or price closes below entry support. This simple approach has good risk-reward if you backtest it properly.
Indicador Pine Script®
