To determine the trend direction, moving averages are commonly used. There are many ways to do this. This could be done by identifying where price is relative to a moving average. To identify the trend's direction, a trader might also use the slope of a moving Average. A trader might also use two or more moving Averages to identify the location of the faster MA relative to the slower MA, or simply look at the stacking of moving Averages.
Logically speaking, if a trader uses the above method to identify trend direction, such as identifying the location a faster MA relative to a slower moving Average, then it could be argued the crossover of these MAs is evidence of a new trend.
Indicators:
- MA-4H
- MACD
Timeframe: 4-hour chart only
Currency Pair: any
Trading Session: any
How to Trade with MACD MA 4 Hour Forex Trading Strategy?
MACD, MA, 4 Hour Forex Trading Strategy uses the Moving Average at 4H custom indicator. This indicator is based on a crossover of moving averages. This indicator can only be used to trade swing strategies.
The standard crossover will remain the same. The faster MA is represented by the green line, while the slower moving average is represented by the red line. The market is bullish if the red line crosses over the green line. The market will be bearish if it crosses below that line.
This will be used with the standard MACD indicator using default parameters. We will focus on the histogram bars for our main signal. We will focus on the time when the histogram bars cross the zero line. The market is bullish if the histogram bars cross above zero. If it crosses below zero, the market will be bearish.
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Buy (Long) Trade Setup
Entry
- MA-4H - The red line should cross over the green line to indicate a bullish trend.
- MACD: If the MACD histogram crosses above zero, it is a sign that a bullish trend has begun
- On the confluence the conditions above, open a buy order
Stop Loss
- Place the stop loss lower than the moving averages
Exit
- When the MA-4H's green line crosses below it, close the trade
Sell (Short) Trade Setup
Entry
- MA-4H - The red line should cross under the green line to indicate a bearish trend.
- MACD: If the MACD histogram crosses below zero, it is a sign that there is a bearish trend.
- On the confluence the conditions above, open a trade order
Stop Loss
- Place the stop loss at the top of the moving averages
Exit
- When the MA-4H's green line crosses over the red line, close the trade.
How to download and install an indicator?
In order to install the indicator on your MT4 platform, you need to follow these steps:
- Click on “Download Indicator” button located at the bottom of the post.
- Save the file to your computer.
- Extract and move the files into MT4>Indicator folder of the MetaTrader4 software file directory.
- Restart your Metatrader platform.
- Navigate to “Indicators.”
- And select the “MACD MA 4 Hour Forex Trading Strategy” template to apply it on the chart.
Note: This indicator was developed by James. AtoZ Markets does not carry any copyrights over this trading tool.
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