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2 Signal Line MACD Forex Trading Strategy

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The 2 Signal Line MACD forex trading strategy is a strategy that suits intraday traders and deploys the 2line_MACD, (T_S_R)-Slope Direction Line and the (T_S_R)-Signal Line custom MT4 indicators in doing this.

Chart Setup

MetaTrader4 Indicators: 2line_MACD.ex4 (default setting), (T_S_R)-Slope Direction Line.ex4 (default setting), (T_S_R)-Signal Line (default setting)

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

Recommended Trading Sessions: London and New York

Currency Pairs: USD/CHF, EUR/USD, USD/JPY, GBP/USD, AUD/USD, USD/CAD, NZD/USD, EUR/CHF, GBP/JPY, EUR/JPY

Download

Download the 2 Signal Line MACD Forex Trading Strategy

Buy Trade Example

Fig. 1.0

Strategy

Long Entry Rules

Enter a buy in the market if the following chart or indicator patterns are in display:

  1. If the blue line of the 2 Signal Line MACD (2line_MACD) custom indicator crosses its red dotted line bottom up, it is an indication to long on the currency pair of interest.
  2. If the lime ribbon of the (T_S_R)-Signal Line custom indicator crosses the light blue ribbon of the (T_S_R)-Slope Direction Line custom indicator bottom up, it is an indication that price is bullish i.e. a buy signal.

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

Exit Strategy/Take Profit for Buy Entry

Exit or take profit on position(s) if the following chart pattern(s) are in display:

  1. If the blue line of the 2 Signal Line MACD (2line_MACD) custom indicator crosses its red dotted line top downward as shown on Fig. 1.0, it is a sign that price is about to reverse i.e. an exit or take profit is advised.
  2. If the red line of the (T_S_R)-Signal Line custom indicator crosses the (T_S_R)-Slope Direction Line custom indicator ribbon downwards, it is a trigger to exit or take profit.

Sell Entry Rules

Enter a sell order if the following rules or conditions holds true:

  1. If the blue line of the 2 Signal Line MACD (2line_MACD) custom indicator crosses its red dotted line top downward, it is a trigger to go short.
  2. If the red ribbon of the (T_S_R)-Signal Line custom indicator crosses the tomato ribbon of the (T_S_R)-Slope Direction Line custom indicator up downwards a shown on Fig. 1.1, it is a sell alert on the pair of interest.

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

Exit Strategy/Take Profit for Sell Entry

Exit or take profit on order(s) if the following chart pattern are in display:

  1. If the blue line of the 2 Signal Line MACD (2line_MACD) custom indicator crosses its red dotted line bottom up, it is a trigger to exit or take profit (Fig. 1.1).
  2. If the lime ribbon of the (T_S_R)-Signal Line custom indicator crosses the ribbon of the (T_S_R)-Slope Direction Line custom indicator bottom up, it is a signal to exit or take profit.

Sell Trade Example

Fig. 1.1

Free Download

Download the 2 Signal Line MACD Forex Trading Strategy

About The Trading Indicators

The 2 Signal Line MACD (2line_MACD) custom indicator is a popular forex indicator that is made up of three vital components i.e. MACD 12-period exponential moving average (12 EMA), 26 period EMA MACD histogram and the MACD signal line (9-period exponential moving average of the MACD.

The (T_S_R)-Signal Line is a trend following indicator with a default period of 15, while the (T_S_R)-Slope Direction Line is equally a trend following indicator but has its period set at 80, which obviously makes it lag more.