5 MA’s Signal Forex Strategy

The 5 MA’s Signal Forex strategy can be utilized when market trends are in either direction (up or down).

It’s a simple strategy based on the Carter 5-exponential moving average indicator that works well for any pair and timeframe.

Forex traders should test different time frames and currency pairs in order to grasp how best they can personalize any forex strategy.

It is ideal for traders to engage the market only during sessions of strong directional price bias.

If price is in an uptrend, one should consider buying once the trading rules are in agreement while a strong downtrend should dictate a sell.

The best currency traders understand the need to stay in tune with the market trend, knowing fully well that “the trend is always your friend.”

Chart Setup

MetaTrader4 Indicators: carter-ma-indicator.ex4 (Inputs Variable Modified; ma3=36, Colors Modified; #3=None, #4=None), stoch-crossing.ex4 (Inputs Variable Modified; KPeriod1=50, DPeriod1=36, Slowing1=28)

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 blue line of the carter-ma-indicator crosses the indicator’s sienna and green lines in a bottom up fashion as shown on Fig. 1.0, price is said to be driven higher i.e. a trigger to go long on the currency pair of focus.
  2. If the dark green upward pointing arrow of the stoch-crossing Metatrader 4 forex indicator pops up somewhat below the candlesticks (see Fig. 1.0), the overall market sentiment is said to be bullish, as such it is a trigger to go long on the designated forex pair.

Stop Loss for Buy Entry: Place stop loss 2-5 pips below 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 blue line of the carter-ma-indicator intersects the sienna line while a bullish trend is running, bulls are said to be stepping back in taking new orders, therefore an exit or take profit is duly advised.
  2. If the stoch-crossing custom indicator displays a red downward pointing arrow during the course of a bullish trend (refer to Fig. 1.0), bulls are said to be losing steam, thus a trigger to exit of take profit is apt.

Sell Entry Rules

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

  1. If the blue line of the carter-ma-indicator crosses the indicator’s sienna and green lines in a top downward manner as exemplified on Fig. 1.1, price is said to be dragged lower i.e. a trigger to go short on the currency pair of interest.
  2. If the red downward pointing arrow of the stoch-crossing custom indicator pops up fairly above the candlesticks as depicted on Fig. 1.1, the general market sentiment is said to be bearish, as such it is a trigger to go short on the currency pair of focus.

Stop Loss for Sell Entry: Place stop loss 2-5 pips above resistance.

Exit Strategy/Take Profit for Sell Entry

Exit or take profit if the following takes center stage:

  1. If the blue line of the carter-ma-indicator intersects the sienna line during a bearish trend, bears power is said to be diminishing, therefore an exit or take profit is duly recommended.
  2. If the stoch-crossing custom indicator pops up a dark green upward pointing arrow during the course of a bearish signal as illustrated on Fig. 1.1, more sellers are said to be leaving the market, therefore an exit or take profit stance is appropriate.

Sell Trade Example

Fig. 1.1

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About The Trading Indicators

The carter-ma-indicator is comprised of five exponential moving averages that are stacked in accordance to their varying periods.

The stoch-crossing custom indicator is an enhanced stochastic indicator that also utilizes a moving average indicator.

It is able to draw its signals based on the crossing of both indicators.

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