The Median forex trading strategy is dependent on three unique indicators i.e. the Median, MA-4H and MACD.
The first two are essential in indicating fresh trends in the market, while the third indicator (MACD) is an oscillator that measures price exhaustion.
Combining these tools into a single strategy is an awesome idea that currency traders will find handy.
Chart Setup
MetaTrader4 Indicators: Median.ex4 (Inputs Variable Modified; per=10, Period_ATR=32), MA-4H.ex4 (Inputs Variable Modified; SecondMa=14), MACD (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
Enter a buy entry if the following indicator or chart pattern gets put on display:
- If the medium sea green line of the MA-4H custom indicator intersects the lines (red & yellow) of the Median custom indicator bottom up as seen on Fig. 1.0, price is said to be taken higher i.e. a trigger to buy the designated currency pair.
- If the dark green histograms of the MACD MT4 indicator takes up the space above the 0.00 level as depicted on Fig. 1.0, price is said to be driven higher, hence a buy signal is said to be in place.
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:
- If while a buy signal is ongoing, the medium sea green line of the MA-4H custom indicator intersects the lines (red & yellow) of the Median custom indicator in a top downward manner, an exit or take profit is advised.
- If a dark green histogram of the MACD MT4 indicator forms below the 0.00 level a while buy signal is ongoing, an exit or take profit will suffice.
Sell Entry Rules
Enter a sell order if the following holds true:
- If the medium sea green line of the MA-4H custom indicator intersects the lines (red & yellow) of the Median custom indicator top downward as shown on Fig. 1.1, price is said to be pushed lower i.e. a trigger to sell the selected currency pair.
- If the dark green histograms of the MACD MT4 indicator takes up the space below the 0.00 level as illustrated on Fig. 1.1, price is said to be pushed lower i.e. a trigger to sell the fx pair of interest.
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 center stage:
- If while a sell signal is running, the medium sea green line of the MA-4H custom indicator intersects the lines (red & yellow) of the Median custom indicator in a bottom up fashion, an exit or take profit is recommended.
- If a dark green histogram of the MACD MT4 indicator forms above the 0.00 level a while sell alert is running, an exit or take profit will do.
Sell Trade Example
Fig. 1.1
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About The Trading Indicators
The Median custom indicator forms a channel with two middle lines, and is simply used to gauge volatility in the activity.
The MA-4H custom indicator on the other hand is deployed to show the moving average of the selected timeframe on the activity chart of the most recent timeframe.
The intersection of the lines of the moving averages gives us clues to possible price trends.
The MACD is an oscillator that combines the Fast EMA (12), Slow EMA (26) and the SMA (9) in one technical study.
Developed by Gerald Appel in 1979, Mac D, as it is also called is a common and multipurpose tool deployed in identifying and following strong trends, and also spotting trend reversals.