MACD And EMA Winning Forex Strategy

A winning forex trading strategy is obviously one that understands that the market is made up of ups and downs, within which profits can be taken in either direction.

Most importantly, no one system can consistently churn out profits, but being able to overcome its sessions of losses is key to staying afloat in the market.

The MACD/EMA Winning forex strategy is designed to keep you on the winning side amidst the turbulence that characterizes the currency market.

The Linear_Regression_Line.ex4, 50 EMA, TTF_hist.ex4 and the MACD indicators are neatly placed on the charts to enhance our ability to measure price regression, gauge price resistance/support, sport reversals and early detection of trends respectively.

Chart Setup

MetaTrader4 Indicators: Linear_Regression_Line.ex4 (Inputs Variable Modified; LRLPeriod=36), 50 EMA (Exponential Moving Average), TTF_hist.ex4 (Inputs Variable Modified; TTFbars=24, t3_period=9), MACD (Parameters Modified; Fast EMA=16, Slow EMA=32)

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

Recommended Trading Sessions: Any (24 hour trading)

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 lime line of the 50 EMA MT4 indicator intersects the blue line of the Linear_Regression_Line indicator in a bottom up manner with price trading slightly above (see Fig. 1.0), price is said to be pushed to the upside i.e. a buy signal is advised.
  2. If the light sea green histograms of the TTF_hist custom indicator gets aligned above the 0.00 level as depicted on Fig. 1.0, a trigger to go long on the selected fx pair is imminent.
  3. If the green histograms of the MACD MT4 indicator piles up above the 0.00 level as shown on Fig. 1.0, more bulls are said to be pushing price higher, hence a trigger to buy the stipulated forex pair.

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

Exit Strategy/Take Profit for Buy Entry

Exit or take profit if the following rules or conditions takes precedence:

  1. If the lime line of the 50 EMA MT4 indicator intersects the blue line of the Linear_Regression_Line indicator to stay above it during a bullish trend, an exit or take profit is duly advised.
  2. If the light sea green histogram of the TTF_hist custom indicator readjust below the 0.00 level as seen on Fig. 1.0, an exit or take profit is recommended.
  3. If the green histograms of the MACD indicator realigns below the 0.00 level while a buy alert is running, a bearish reversal is said to be underway i.e. an exit or take profit is advised.

Sell Entry Rules

Enter a sell order if the following holds sway:

  1. If the lime line of the 50 EMA MT4 indicator intersects the blue line of the Linear_Regression_Line indicator in a top downward fashion while price trades somewhat below (see Fig. 1.1), price is said to be taken lower i.e. a sell signal is recommended.
  2. If the light sea green histograms of the TTF_hist custom indicator gets aligned below the 0.00 level as exemplified on Fig. 1.1, a trigger to go short on the designated forex pair is in the cards.
  3. If the green histograms of the MACD MT4 indicator piles up below the 0.00 level as illustrated on Fig. 1.1, more bears are said to be pushing price lower, hence a trigger to sell the designated currency pair.

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

Exit Strategy/Take Profit for Sell Entry

Exit or take profit if the following takes to the fore:

  1. If the lime line of the 50 EMA MT4 indicator intersects the blue line of the Linear_Regression_Line indicator to stay below while a bearish trend is running, it is a trigger to exit or take profit immediately.
  2. If the light sea green histogram of the TTF_hist custom indicator readjust above the 0.00 level as shown on Fig. 1.1, an exit or take profit is advised.
  3. If the green histograms of the MACD indicator readjust above the 0.00 level during a sell signal, a bullish reversal is said to be underway i.e. an exit or take profit will do.

Sell Trade Example

Fig. 1.1

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About The Trading Indicators

The Linear_Regression_Line.ex4 custom indicator is primarily used in determining the direction of a trend.

The indicator essentially measures the line of best fit for a price series.

The 50 EMA is an exponential moving average that has its period set at 50 and reduces the lag by adding more weight to recent price.

The TTF_hist.ex4 is made of light sea green histograms and a dotted red line and will most align above/below the 0.00 level to define bulls/bears market conditions.

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

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