MACD Moving Average Forex Trading Strategy

Making profits in the currency trading markets is something every trader wants to continuously enjoy, but in practice, the market does pull a tricky one on us here and there.

Knowing this truth is key to understanding that downturns are unavoidable, but overall, profits can be attained.

The MACD Moving Average forex trading strategy is a system that keeps you profitable in the long-term. It provides traders with easy to spot entry and exit signals in the overall direction of the trend.

Chart Setup

MetaTrader4 Indicators: True Range Envelopes.ex4 (Inputs Variable Modified; MA_Period=7), 50 EMA, 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

Download

Download the MACD Moving Average Forex Trading 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 lime line of the 50 EMA MT4 indicator intersects the red line of the True Range Envelopes indicator in a bottom up manner (see Fig. 1.0), price is said to be driven higher i.e. a trigger to buy the designated forex pair.
  2. If the green histograms of the MACD indicator break above the 0.00 level as depicted on Fig. 1.0, more bulls are said to be in control of the session, hence a buy alert will suffice.

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 lime line of the 50 EMA MT4 indicator cuts across the red line of the True Range Envelopes custom indicator during a bullish trend, it is a signal to exit or take profit forthwith.
  2. If the green histograms of the MACD MT4 indicator readjust below the 0.00 level during a bullish trend, it is indicative of weaning bulls power, as such an exit or take profit will do.

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 red line of the True Range Envelopes indicator in a top downward fashion (refer to Fig. 1.1), price is said to be driven lower i.e. a trigger to sell the selected currency pair.
  2. If the green histograms of the MACD indicator break below the 0.00 level as illustrated on Fig. 1.1, more bears are said to be in charge of the session, hence a sell alert is imminent.

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 lime line of the 50 EMA MT4 indicator cuts through the red line of the True Range Envelopes custom indicator during a bearish trend, it is a signal to exit or take profit straightaway.
  2. If the green histograms of the MACD MT4 indicator readjust above the 0.00 level during a bearish alert, it is indicative of halting bears power, as such an exit or take profit is advised.

Sell Trade Example

Fig. 1.1

Free Download

Download the MACD Moving Average Forex Trading Strategy

About The Trading Indicators

The True Range Envelopes.ex4 custom indicator is a trend indicator that uses the SMA (14) as its middle band along with two outer upper and lower bands forming a channel.

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 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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