Double Moving Average Signal Forex Strategy
A forex trader can develop a simple trading strategy that allows him take advantage of the market’s massive trading opportunities with just a few technical indicators.
A well-known problem with most technical indicators, nevertheless, is the disparity in their efficiency.
The Double Moving Average Signal Forex strategy will aid traders take control of their trading in a manner that allows them forecast with great precision when a forex pair will rise or decline.
It is an enhanced trading strategy that can be used to determine both long-term and short-term trading trends with good accuracy.
Are you ready?
Lets explain how this system works with some built-in examples:
MetaTrader4 Indicators: cao-indicator.ex4 (Inputs Variable Modified; ShortMA=14, LongMA=100), kaufman-bands.ex4 (Colors Modified; #1=None, #2=None), mva-s (Colors Width Modified; #0=2)
Preferred Time Frame(s): 1-Minute, 5-Minute, 15-Minutes, 30-Minutes, 1-Hour, 4-Hours, 1-Day, 1-Week
Recommended Trading Sessions: Any
Currency Pairs: Any pair
Buy Trade Example
Long Entry Rules
Enter a bullish trade if the following indicator or chart pattern gets put on display:
- If the histograms (green & red) of the cao-indicator gets aligned above the 0.00 horizontal reference level as shown on Fig. 1.0, price is said to be driven higher, as such a trigger to go long on the designated currency pair.
- If the red line of the mva-s Metatrader 4 forex indicator crosses the sienna line of the kaufman-bands custom indicator in a bottom up manner as seen on Fig. 1.0, the overall market sentiment is said to be bullish, therefore a buy order will suffice.
Stop Loss for Buy Entry: Place stop loss below the most recent swing low.
Exit Strategy/Take Profit for Buy Entry
Exit or take profit from all trades if the following rules or conditions takes precedence:
- If while a bullish trend is ongoing, the cao-indicator pops up a red histogram that is aligned below the 0.00 signal level, it is an indication that an increasing bulls population are closing their orders, therefore an exit or take profit is recommended.
- If the red line of the mva-s indicator intersects the sienna line of the kaufman-bands forex indicator during a bullish trend, it is pointing to diminishing bulls power, as such an exit or take profit is advised.
Sell Entry Rules
Go short if the following setups gets displayed rightly on the activity chart:
- If the histograms (red & green) of the cao-indicator takes up the spot below the 0.00 horizontal signal level as depicted on Fig. 1.1, price is said to be dragged lower, thus an alert to sell the selected forex pair.
- If the red line of the mva-s custom indicator crosses the sienna line of the kaufman-bands forex indicator in a top downward fashion (refer to Fig. 1.1), the general market sentiment is said to be bearish, if so, a sell order will do.
Stop Loss for Sell Entry: Place stop loss above the most recent swing high.
Exit Strategy/Take Profit for Sell Entry
Exit or take profit if the following takes center stage:
- If while a bearish trend is ongoing, the cao-indicator pops up a green histogram above the 0.00 horizontal level, it is an indication of a diminishing bear power, therefore an exit or take profit stance is advised.
- If the red line of the mva-s indicator intersects the sienna line of the kaufman-bands forex indicator during a bearish trend, bear power is said to be weaning, as such an exit or take profit is recommended.
Sell Trade Example
About The Trading Indicators
The cao-indicator quickly give traders insight on trends and its accompanying strength. the coa within its name stands for Chaos Accelerator Oscillator.
The kaufman-bands was developed by Perry Kaufman. It’s used to find turning points, spot overall trends and filter price movements.
The mva-s is a moving average indicator that is more likely to smoothen price.