The Accurate Forex strategy for Metatrader 5 is quite straightforward, thereby allowing traders take concise market decisions that can safeguards their investments in the forex market.
There are no perfect trading tools.
Howbeit, experienced traders are always on the lookout for avenues in which they can deploy multiple technical indicators in a bid to shore up the weak spots.
It is recommended that you rigorously test every strategy (including this one) before using it on a live trading account.
This will enable you verify what actually works and what doesn’t work for you in a risk-free trading situation.
Trade Setup
MetaTrader 5 Indicators: 50 EMA, mama.ex5 (Colors Width Modified; MAMA=2, FAMA=2), AATR.ex5 (Inputs Variable Modified; ATR period=28)
Trade Style: Any (scalping, day trading, swing trading)
Trading Sessions: Any (London, New York, Tokyo)
Currency Pairs: Any (Majors, Cross and Exotic)
Platform: Metatrader 5 (MT5)
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Buy Trade Example: EURUSD, H1 Chart
Fig. 1.0
Trading Strategy Rules For Buy and Sell Trades Explained
Buy Entry
Enter a buy trade if the following trading conditions are met:
- If the medium blue line of the 50 EMA Metatrader 5 forex indicator crosses below the smoother lines (lime & red) of the mama indicator as depicted on Fig. 1.0, bullish pressures is said to be building, therefore a buy alert will suffice.
- If the green histograms of the AATR custom indicator gets stacked within its window as illustrated on Fig 1.0, price is said to be driving higher i.e. a trigger to buy the currency pair of interest.
Suggested Stop Loss for Buy Entry: Place stop loss below medium-term support.
Suggested Exit Strategy/Take Profit for Buy Trade
Exit the buy trade if the following trading conditions are met:
- If while a bullish trend is running the red line of the mama indicator intersects its lime line, it is signaling a likely end to the current trend, therefore an exit or take profit is advised.
- If the AATR custom indicator displays a red histogram while a bullish trend is ongoing (see Fig. 1.0), it is pointing to weaning bulls power, thus an exit or take profit is recommended.
Sell Entry
Open a sell trade if the following trading conditions are met:
- If the medium blue line of the 50 EMA indicator crosses above the smoother lines (lime & red) of the mama indicator as shown on Fig. 1.1, bearish pressures is said to be intensifying, therefore a sell alert will do.
- If the red histograms of the AATR custom indicator gets stacked within its window as exemplified on Fig. 1.1, price is said to be pushing lower i.e. a trigger to sell the currency pair of interest.
Suggested Stop Loss for Sell Entry: Place stop loss above medium-term resistance.
Suggested Exit Strategy/Take Profit for Sell Entry
Exit the sell trade if the following trading conditions are met:
- If the red line mama indicator intersects its lime line while a bearish trend is ongoing, the strength of the current trend is said to be diminishing, thus a trigger to exit or take profit at once.
- If while a bearish trend is running, the AATR custom indicator displays a green histogram, bulls are said to be outnumbering the bears, therefore an exit or take profit stance is endorsed
Sell Trade Example: EURUSD, H1 Chart
Fig. 1.1
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MT5 Trading Indicators Used For This Strategy
The 50 EMA is an exponential moving average that has its period set at 50 and reduces price lag by adding more weight to the recent price.
The MAMA Metatrader 5 forex indicator is a set of moving average lines wrapped around price bars.
The indicator is fundamentally based on the Exponential Moving Average algorithm.
The AATR is short for Average Average True Range and it represents a Metatrader 5 custom forex indicator within a standard smoothed ATR displayed as a colored histogram.