7 MACD Forex Trading Strategy

The 7 MACD forex trading strategy takes advantage of the 7 MACD custom indicator and a set of exponential moving averages that are present by default on the Metatrader 4 platform and surely delivers on profit forecast.

Trading can be a complex adventure, but using this strategy is a proven way to simplify things and get rolling like the market professionals.

Chart Setup

MetaTrader4 Indicators: 7_MACD.ex4 (color modified; main = DarkGreen), 14 EMA (red), 28 EMA (lime) & 54 EMA (blue)

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

Recommended Trading Sessions: Any

Currency Pairs: Any

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Buy Trade Example

Fig. 1.0

Strategy

Long Entry Rules

Enter a buy position in the market if the following conditions or rules holds true:

  1. If the green histograms and the red dotted line of the 7_MACD.ex4 indicator aligns above the 0.00 signal level, it is an indication that price is experiencing some upward pressures i.e. a signal to go long on the pair of interest.
  2. If the EMAs intersect in a manner whereby the 54 EMA (blue) is at the bottom, 28 EMA (lime) stays in the middle, 14 EMA (red) is at the top, while price is trading somewhat above the lines as shown on Fig. 1.0, price is said to be pushed higher i.e. a trigger to buy the pair of interest.

Stop Loss for Buy Entry: Place stop loss below immediate support.

Exit Strategy/Take Profit for Buy Entry

Exit or take profit if the following chart or indicator pattern gets displayed:

  1. If the green histograms of the 7_MACD.ex4 indicator forms below the 0.00 signal level during a buy signal, it points to weaning bullish sentiment, as such an exit or take profit is recommended.
  2. If price closes below the 54 EMA (blue) indicator line, it is a signal that shows more buyers exiting the market than sellers, hence an exit or take profit is advised.

Sell Entry Rules

Enter a sell position if the following conditions or rules hold sway:

  1. If the green histograms and the red dotted line of the 7_MACD.ex4 indicator aligns below the 0.00 signal level, it is an indication that price is being pushed lower i.e. a signal to sell.
  2. If the EMAs intersect in a manner in which the 54 EMA (blue) lays at the top, 28 EMA (lime) stays in the middle, 14 EMA (red) is at the bottom, while price is trading somewhat below the lines as shown on Fig. 1.1, price is said to be pressured lower i.e. a trigger to sell the asset of interest.

Stop Loss for Sell Entry: Place stop loss above immediate resistance.

Exit Strategy/Take Profit for Sell Entry

Exit or take profit if the following chart or indicator gets displayed:

  1. If the green histograms of the 7_MACD.ex4 indicator realigns above the 0.00 signal level during a bearish trend, it points to weaning bearish sentiment, as such an exit or take profit is recommended.
  2. If price closes above the 54 EMA (blue) indicator line, it is a signal that indicates more sellers leaving the market than buyers, hence an exit or take profit should be implemented.

Sell Trade Example

Fig. 1.1

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About The Trading Indicators

The exponential moving average (14 EMA, 28 EMA & 54 EMA) adds more weight to the latest data and reacts faster to recent changes in prices.

The 7 Moving average convergence divergence (MACD) custom built indicator on the other hand is a trend-following momentum indicator that reveals the connection between two moving averages of price.

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