MACD & Momentum Forex Strategy

The MACD & Momentum forex strategy enables traders to quickly buy and sell pairs in trending markets at a good price with the help of the Momentum and MACD indicator.

The following charts below will help us further understand how things work:

Chart Setup

MetaTrader4 Indicators: Triggerlines2.ex4 (Inputs Variable Modified; Rperiod=50, LSMA_Period=12), Momentum (Parameters Modified; Period=36), 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

Currency Pairs: Any pair

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Download the MACD & Momentum Forex Strategy

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 blue lines of the Triggerlines2 custom indicator gets aligned below the candlesticks as shown on Fig. 1.0, price is said to be driven higher i.e. a trigger to buy the designated forex pair.
  2. If the dodger blue line of the Momentum MT4 indicator break above the 99.85942 level as exemplified on Fig. 1.0, price is said to be pushed to the upside, hence a buy trigger is said to be imminent.
  3. If the green histograms of the MACD MT4 indicator gets placed above the 0.00 level (see Fig. 1.0), price is said to be pushed higher, hence a buy trigger is said to be looming.

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

Exit Strategy/Take Profit for Buy Entry

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

  1. If the Triggerlines2 custom indicator turns red during a bullish alert (refer to Fig. 1.0), it is pointing to diminishing bulls power i.e. a trigger to exit or take profit at once.
  2. If the dodger blue line of the Momentum MT4 indicator dip below the 99.85942 level, price is said to be in a bearish reversal, as such an exit or take profit will suffice.
  3. If the green histograms of the MACD MT4 indicator readjust below the 0.00 level while a buy alert is running, an exit or take profit is dully advised.

Sell Entry Rules

Enter a sell order if the following holds sway:

  1. If the red lines of the Triggerlines2 custom indicator gets aligned above the candlesticks as seen on Fig. 1.1, price is said to be pushed lower i.e. a trigger to sell the selected currency pair.
  2. If the dodger blue line of the Momentum MT4 indicator break below the 99.85942 level as depicted on Fig. 1.1, price is said to be driven lower, hence a sell trigger is said to be in the offing.
  3. If the green histograms of the MACD MT4 indicator gets placed below the 0.00 level (see Fig. 1.1), price is said to be taken to the downside, hence a trigger to go short on the pair of focus.

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

Exit Strategy/Take Profit for Sell Entry

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

  1. If the Triggerlines2 custom indicator turns blue during a bearish alert (see Fig. 1.1), it is pointing to diminishing bears power i.e. a trigger to exit or take profit immediately.
  2. If the dodger blue line of the Momentum MT4 indicator surges above the 99.85942 level while a sell signal is ongoing, price is said to be making a bullish reversal, as such an exit or take profit will do.
  3. If the green histograms of the MACD MT4 indicator realigns above the 0.00 level during a sell signal, an exit or take profit is dully recommended.

Sell Trade Example

Fig. 1.1

Free Download

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About The Trading Indicators

The Triggerlines2.ex4 is a custom indicator that is designed after the moving average but is made up of two lines, with changing colors, red for bears and blue for bulls.

The Momentum indicator compares when the current price is in relative to where price was in the past.

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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