5-Min MACD Forex Trading Strategy

The 5-Min MACD forex trading strategy provides traders with a good amount of buy/sell trade opportunities throughout the 3 most important trading sessions.

I highly recommend to apply this strategy on low spread forex pairs such as EUR/USD, GBP/USD and USD/JPY for maximum results.

Chart Setup

MetaTrader4 Indicators: vr_moving_average.ex4 (Inputs Variable Modified; Period=28), i-AMA-Optimum.ex4 (Inputs Variable Modified; Fast=6.0), Wallaby.ex4 (Inputs Variable Modified; KPeriod=14, DPeriod=6, Slowing=6, Timeframe1=5, Timeframe3=5), MACD (Default Setting)

Preferred Time Frame(s): 5-Minute

Recommended Trading Sessions: London, New York, Tokyo

Currency Pairs: Any pair (low spread)

Download

Download the 5-Min MACD Forex Trading Strategy

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 black dotted orange line of the i-AMA-Optimum MT4 indicator intersects the mostly blue line of the vr_moving_average custom indicator in a bottom up manner as seen on Fig. 1.0, a trigger to go long on the selected fx pair is appropriate.
  2. If the red line of the Wallaby custom indicator break above the 50.00 level as depicted on Fig. 1.0, more bulls are said to be pushing price higher, hence a buy alert will suffice.
  3. If the green histograms of the MACD custom indicator break above the 0.00 level as shown on Fig. 1.0, a buy signal is imminent.

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

Exit Strategy/Take Profit for Buy Entry

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

  1. If price closes below the black dotted orange line of the i-AMA-Optimum MT4 custom indicator during a buy signal, more bulls are said to be exiting their positions i.e. an exit or take profit is advised.
  2. If the red line of the Wallaby custom indicator dips below the 50.00 level as illustrated on Fig. 1.0, price is said to be making a U-turn, hence an exit or take profit is advised.
  3. If the green histograms of the MACD MT4 indicator readjust to dip below the 0.00 level while a buy entry is ongoing, it is a call to exit or take profit at once.

Sell Entry Rules

Enter a sell order if the following holds sway:

  1. If the black dotted orange line of the i-AMA-Optimum MT4 indicator cut through the mostly red line of the vr_moving_average custom indicator in a top downward fashion as depicted on Fig. 1.1, a trigger to go short on the designated currency pair.
  2. If the red line of the Wallaby custom indicator dip below the 50.00 level as exemplified on Fig. 1.1, more bears are said to be taking price lower, hence a sell alert will do.
  3. If the green histograms of the MACD custom indicator dips below the 0.00 level as illustrated on Fig. 1.1, a sell alert is looming.

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

Exit Strategy/Take Profit for Sell Entry

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

  1. If price closes above the black dotted orange line of the i-AMA-Optimum MT4 custom indicator during a sell alert, more bears are said to be exiting their positions, hence an exit or take profit will do.
  2. If the red line of the Wallaby custom indicator surges above the 50.00 level as shown on Fig. 1.1, price is said to be making a bullish reversal, hence an exit or take profit is recommended.
  3. If the green histograms of the MACD MT4 indicator readjust to form above the 0.00 level while a sell entry is running, it is a trigger to exit or take profit immediately.

Sell Trade Example

Fig. 1.1

Free Download

Download the 5-Min MACD Forex Trading Strategy

About The Trading Indicators

The vr_moving_average.ex4 is a custom indicator that is basically an enhanced version of the standard moving average.

The indicator is able to spot patterns and uniqueness in price dynamics which are undetectable to the naked eye.

The i-AMA-Optimum.ex4 is an optimized version of the Kaufman’s Adaptive Moving Average (AMA) that was originally developed by Perry Kaufman and finds use on short and long periods.

The Wallaby.ex4 custom indicator is a modified stochastic indicator that performs well at spotting overbought and/or oversold market conditions.

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