Butterworth MACD Forex Trading Strategy

The Butterworth MACD forex trading strategy has well thought-out buy and sell trading rules that will help you trade currencies, cryptocurrency, commodities and even stocks.

It is a simple strategy that follows the trend with the help of the powerful Fratelli MACD indicator.

Chart Setup

MetaTrader4 Indicators: -wmmm-twoPoleButterworth.ex4 (Inputs Variable Modified; CutoffPeriod=36, Shift=1, Colors Width Modified; #1=2, #2=2), Fratelli_MACD.ex4 (Default Setting)

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

Recommended Trading Sessions: Any

Currency Pairs: Any pair

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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 line of the -wmmm-twoPoleButterworth.ex4 custom indicator turns blue as depicted on Fig. 1.0, price is said to be driven higher i.e. a trigger to buy the designated currency pair.
  2. If the lime dotted line of the Fratelli_MACD.ex4 custom indicator gets aligned above the 0.00 level as illustrated on Fig. 1.0, price is said to be taken to the upside i.e. a trigger to go long on the fx pair of interest.

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 while a buy signal is running, the line of the -wmmm-twoPoleButterworth.ex4 custom MT4 indicator turns red (see Fig. 1.0), an exit or take profit is recommended.
  2. If the dotted line of the Fratelli_MACD.ex4 custom indicator dips below the 0.00 level while a buy signal is ongoing, it is an indication of a possible bearish reversal i.e. a trigger to exit or take profit forthwith.

Sell Entry Rules

Enter a sell order if the following holds true:

  1. If the line of the -wmmm-twoPoleButterworth.ex4 custom indicator turns red as shown on Fig. 1.1, price is said to be pushed lower i.e. a trigger to sell the selected forex pair.
  2. If the magenta dotted line of the Fratelli_MACD.ex4 custom indicator gets aligned below the 0.00 level as seen on Fig. 1.1, price is said to be taken lower i.e. a trigger to go short on the fx pair of focus.

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 while a sell signal is ongoing, the line of the -wmmm-twoPoleButterworth.ex4 custom MT4 indicator turns blue (check Fig. 1.1), an exit or take profit is advised.
  2. If the dotted line of the Fratelli_MACD.ex4 custom indicator surges above the 0.00 level while a sell signal is being observed, it is an indication of a possible bullish reversal i.e. a trigger to exit or take at once.

Sell Trade Example

Fig. 1.1

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About The Trading Indicators

The -wmmm-twoPoleButterworth.ex4 custom indicator is a modified moving average indicator that is deployed in measuring trend.

The Fratelli_MACD.ex4 is a custom indicator that is centered on the common MACD (Moving Average Convergence-Divergence) indicator.

The indicator is able to measure the strength or weakness of market trend.

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