Moving averages are among the most searched trading tools on our Forex trading strategy directory. In this article, we will share the top 5 Moving Average forex trading systems for MT4 and MT5 traders.
August 12, 2020, | AtoZ Markets – Determining the trend in the Forex market is very important for successful trading. Indicators help traders to determine the price direction of the market. One of the most commonly used indicators is the Moving Average. The indicator will help traders to determine the trend direction, its possible reversals, as well as a flat market, while the price of the currency pair is neither rising nor declining.
Four types of Moving Averages in trading
Moving Average is a trend indicator. The working mechanism is quite simple for this indicator. Essentially you calculate a linear price according to the previous price movements. As such, the MA assists traders by confirming the trend. On the chart, this curve mirrors the price direction of the pair, but its movements are smoother. It can be useful for traders to determine upward and downward trends with moving average.
There are four basic types of moving average:
- Simple moving average (SMA): Its values are simple arithmetic means of the price changes.
- Exponential moving average (EMA): Here more weight is given to the latest data. The weight is calculated in the arithmetic series.
- Linearly weighted moving average: More weight is given to the latest data, however, the weight is calculated exponentially.
- Smoothed moving average: More weight is given to the latest data, it takes into account the price values beyond the time period (their influence is not significant).
With so many Forex strategies and trading systems on the internet, our research team at AtoZMarkets has selected the top 5 best Moving Average Forex trading systems from the AtoZMarkets trading tool database and now present it to you. The following is a list of top 5 Moving Average based best Forex trading systems that you can download for free.
Top Moving Average Forex trading systems
We begin looking at the five best moving average based Forex systems from a fifth place. Note that an indicator on the fifth place, for example, is not any worse from the one in first. We based the order of selection on general application and usage.
Multi Moving Average MT4 indicator
Multi Moving Average MT4 indicator enables traders to determine the direction of several different moving averages by compiling them in one window. As a result, this indicator will help you to understand which trend currently prevails. You can adjust the MA values and types to suit your trading style, without over-cramping your MT4 chart.
You can download the Multi Moving Average MT4 indicator for free and check it out yourself.
The Zone Bill Williams indicator
On the fort place of top 5 best Moving Average Forex trading systems, we have The Zone indicator. The system projects Buy and Sell signals according to Bill Williams’s definition of the Trading Zone. You can use this tool as a confirmation to add on more to orders opened in the direction of the trend. In addition, you can use the zone Bill Williams indicator with a filter indicator to form a unique trading system.
You can download The Zone Forex trading tool for free and test it out.
My custom 2MA indicator
Well, I hope I am not biased about this strategy being on our top 5 Moving Average trading strategies list. Since it is my own trading strategy, please do share your feedback with me in the comments.
It is always good to keep it simple when trading Forex. This custom 2MA indicator allows you to switch between two sets of preselected MAs with just a click of a button. My personal FX trading strategy relies on Simple Moving Averages but I did not want to jam my chart with more than two SMAs at a time.
You can download My custom 2MA indicator for free and test it yourself. In addition, here is another 2MA simple Forex trading strategy with 70% profitability purely based on SMAs for you to use with this indicator.
3 SMA Pip Machine
3 SMA Pip Machine is a simple Forex trading system based on three moving averages and a trend filter. The idea behind the indicator is very powerful. In some part, this Forex system is based on the same 2MA simple Forex trading strategy.
You can download 3 SMA Pip Machine for free and test it on a Demo account now.
Yagub Rahimov’s Simple Trading Strategy
The first place of the top 5 Moving Average Forex trading systems belongs to basic Yagub Rahimov’s moving average and breakout based Simple Trading Strategy. It requires little market knowledge and works with a check-box to qualify entries.
From Yagub Rahimov’s own words:
“I know there are many of you out there who believes that Holly Grail trading strategies exist. However I don’t believe in such thing, nor intend to find one! Hence this strategy I have managed to develop will only have a maximum of 70% winning probability. And yes, it will lose too! Therefor, you need to optimize and make it your own strategy!”
The trading strategy uses 1/1.5 risk-reward ratio by using 1% risk per entry with a maximum of 3 entries per day on EURUSD and GBPUSD currency pairs.
You can download Yagub Rahimov’s Simple Trading Strategy for free here and test it yourself.
Think we missed something? Let us know in the comment section below.
This article was updated by Samson Ononeme on August 12, 2020, and originally created on May 3, 2018.