4-Hour MACD Forex Trading Strategy

Forex traders can look to earn money in a variety of ways. One means is to trade on longer term frames i.e. 4-hour and above.

This method demands a sheer amount of patience, but the good thing here is that you can have a win/loss ratio of below 50% and still be in the profits.

The 4-Hour MACD forex trading strategy is built around the highly popular MACD indicator and delivers great entry and exit signals for any currency pair.

Chart Setup

MetaTrader4 Indicators: forexsignals.ex4 (Inputs Variable Modified; period=14, Stoplosses=false, ShowInformation=false), Trend_Mirror.ex4 (Inputs Variable Modified; MovingPeriod=40.0, MovingShift=2.0), MACD (Default Setting)

Preferred Time Frame(s): 4-Hour

Recommended Trading Sessions: Any

Currency Pairs: Any pair

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Buy Trade Example

Fig. 1.0

Strategy

Long Entry Rules

Initiate a buy entry if the following indicator or chart pattern gets put on display:

1. If the yellow upward pointing arrow of the forexsignals custom indicator pops up below the candles as seen on Fig. 1.0, price is said to be pressured higher i.e. a trigger to go long on the designated forex pair.

2. If the red line of the Trend_Mirror custom indicator cuts through its blue line to hover above, bulls are said to be pushing price to the upside, as such a buy alert is imminent.

3. If the green histograms of the MACD MT4 indicator break above the 0.00 level as exemplified on Fig. 1.0, a buy signal is said to be in the offing.

Stop Loss for Buy Entry: Place stop loss 5 pips below trading support.

Exit Strategy/Take Profit for Buy Entry

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

1. If a red downward pointing arrow of the forexsignals custom indicator pops up during a buy alert somewhat above price bars (see Fig. 1.0), it is a trigger to exit or take profit at once.

2. If the red line of the Trend_Mirror custom indicator intersects the blue line to stay below while a bullish trend is ongoing, a bearish reversal is said to be looming, as such an exit or take profit will suffice.

3. If the MACD MT4 indicator displays a green histogram that is placed below the 0.00 level during a buy signal, bulls power is said to be weaning, as such an exit or take profit will do.

Sell Entry Rules

Enter a sell order if the following holds sway:

1. If the red downward pointing arrow of the forexsignals custom indicator pops up above price bars as depicted on Fig. 1.1, price is said to be pressured lower i.e. a trigger to go short on the fx pair of interest.

2. If the blue line of the Trend_Mirror custom indicator cuts through its red line to hover above, bears are said to be pushing price to the downside, as such a sell alert is in the cards.

3. If the green histograms of the MACD MT4 indicator dip below 0.00 level as illustrated on Fig. 1.1, a sell alert is said to be looming.

Stop Loss for Sell Entry: Place stop loss 5 pips above trading resistance.

Exit Strategy/Take Profit for Sell Entry

Exit or take profit if the following takes to the fore:

1. If a yellow upward pointing arrow of the forexsignals custom indicator pops up during a buy alert slightly below the candles, it is a trigger to exit or take profit immediately.

2. If the blue line of the Trend_Mirror custom indicator intersects the red line to stay below during a sell trigger, a bullish reversal is said to be pending, as such an exit or take profit will do.

3. If the MACD MT4 indicator displays a green histogram that is aligned above the 0.00 level during a sell signal, bears power is said to be halting, hence a trigger to exit or take profit forthwith.

Sell Trade Example

Fig. 1.1

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About The Trading Indicators

The Forexsignals.ex4 custom indicator is a trend indicator that delivers buy and sell signals via its yellow and red arrows respectively.

The arrows come with an attached star that is filled with the same color as the arrow.

The Trend_Mirror.ex4 is an important custom indicator that delivers buy and sell signal when the red line red line crosses the blue line.

The Moving average convergence divergence (MACD) is a trend-following momentum indicator that reveals the connection between two moving averages of price.

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