3 MA Buy Sell Forex Strategy

The 3 MA Buy Sell Forex trading strategy is a simple trend following strategy that is built based on moving averages and one accurate cloud indicator.

The strategy is designed to buy off market dips during an uptrend or sell the rallies during a downtrend.

The 3 MA Buy Sell Forex Strategy is technically a very simple one.

It is known to generate long or short signals when the indicator interacts with price.

There’s a bit of flexibility that comes when trading this strategy due to the safety of trades triggered in the direction of momentum.

The following examples will offer us a better understanding of how things play out.

Chart Setup

MetaTrader4 Indicators: 3-ma-buy-sell.ex4 (Inputs Variable Modified; FasterMA=10, FasterShift=-10, MediumMA=36, MediumShift=-15; Colors Width Modified; #0=3, #1=3), dat-cloud-indicator.ex4 (Default Setting)

Preferred Time Frame(s): 1-Minute, 5-Minute, 15-Minutes, 30-Minutes, 1-Hour, 4-Hours, 1-Day, 1-Week

Recommended Trading Sessions: Any

Currency Pairs: Any pair

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Buy Trade Example

Fig. 1.0

Strategy

Long Entry Rules

Enter a bullish trade if the following indicator or chart pattern gets put on display:

  1. If the 3-ma-buy-sell Metatrader 4 forex indicator displays a red upward pointing arrow that is aligned below the candlesticks as shown on Fig. 1.0, price is said to be driven higher i.e. a trigger to buy the stipulated forex pair.
  2. If the dat-cloud-indicator displays a corn flower blue cloud that is aligned somewhat below price bars as exemplified on Fig. 1.0, the overall market sentiment is said to be bullish, hence a buy order will suffice.

Stop Loss for Buy Entry: Place stop loss 3-5 pips below short-term support.

Exit Strategy/Take Profit for Buy Entry

Exit or take profit from all trades if the following rules or conditions takes precedence:

  1. If the 3-ma-buy-sell custom indicator displays a green downward pointing arrow that is positioned above the candlesticks during a bullish trend, it is an indication of a possible reversal, as such an exit or take profit will do.
  2. If the corn flower blue cloud of the dat-cloud-indicator thins out while a bullish trend is running, price is said to be making a probable U-turn i.e. a trigger to exit or take profit at once.

Sell Entry Rules

Go short if the following setups gets displayed successfully on the activity chart:

  1. If the 3-ma-buy-sell Metatrader 4 forex indicator displays a green downward pointing arrow that is placed above the candlesticks as seen on Fig. 1.1, price is said to be pushed lower i.e. a trigger to sell the stipulated currency pair.
  2. If the dat-cloud-indicator displays a violet cloud that is aligned slightly above the candlesticks as depicted on Fig. 1.1, the general market sentiment is said to be bearish, hence a trigger to go short on the forex pair of focus.

Stop Loss for Sell Entry: Place stop loss 3-5 pips above short-term resistance.

Exit Strategy/Take Profit for Sell Entry

Exit or take profit if the following takes center stage:

  1. If the 3-ma-buy-sell custom indicator displays a red upward pointing arrow that is aligned below the candlesticks while a bearish trend is running, it is an indication of a probable price reversal, as such an exit or take profit will suffice.
  2. If the violet cloud of the dat-cloud-indicator fades out during a bearish trend, price is said to be making a possible bullish reversal, as such an exit or take profit will suffice.

Sell Trade Example

Fig. 1.1

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About The Trading Indicators

The 3-ma-buy-sell.ex4 custom indicator is a technical tool that uses three moving averages (just as its name suggest) to determine trend direction.

The periods of these MAs can be modified to suit individual trading preferences.

The dat-cloud-indicator.ex4 uses Ichimoku (Tenkan, Kijun & Senkou) and a simple moving average indicators to define the various properties of price (trend, momentum and reversal) during trading.

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