Reduced Lag MA Forex Trading Strategy

The reduced LagMA forex trading strategy combines two key technical indicators i.e. the RSItv and the reducedlagma custom indicators in dishing out signal.

Once the indicators are added unto the activity chart, the rest is history – just watch out for the entry conditions as described below.

Chart Setup

MetaTrader4 Indicators: RSItv.ex4 (default setting), reducedlagma.ex4 (default setting)

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

Recommended Trading Sessions: Any

Currency Pairs: Any

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Buy Trade Example

Fig. 1.0

Strategy

Long Entry Rules

Place a buy order in the market if the following conditions or rules are adhered to:

  1. If price opens and closes above the red line of the reduced lag moving average custom indicator (with the blue standard moving average line aligned below the red line) , it is an indication that price is being pushed to the upside i.e. a bullish signal.
  2. If the lime colored signal line of the RSItv.ex4 custom indicator breaks above the 50.0 signal level, a bullish trend is in the cards and a long position should be initiated.

Stop Loss for Buy Entry: Place stop loss below support or below the blue SMA line.

Exit Strategy/Take Profit for Buy Entry

Exit or take profit on position(s) if the following indicator or chart pattern gets displayed:

  1. If price closes below the red line of the reduced lag moving average custom indicator, price is then said to taking a turn, at this point an exit or take profit will do.
  2. If the signal line of the RSItv.ex4 custom indicator breaks below the 50.0 signal line as shown on Fig. 1.0, an exit or take profit is advised. In most cases, the signal line changes its color to red, which further supports the bearish sentiment.

Sell Entry Rules

Enter a sell order if the following conditions or rules are true:

  1. If price opens and closes below the red line of the reduced lag moving average custom indicator (with the blue line aligned above the red line), it is an indication that price is being pushed to the downside i.e. a sell signal.
  2. If the red colored signal line of the RSItv.ex4 custom indicator breaks below the 50.0 signal level, a bearish trend is in the cards and a sell position should be opened.

Stop Loss for Sell Entry: Place stop loss above resistance or above the blue SMA line.

Exit Strategy/Take Profit for Sell Entry

Exit or take profit on position(s) if the following rules or conditions holds true:

  1. If price closes above the red line of the reduced lag moving average custom indicator as shown on Fig. 1.1, an exit or take profit is advised.
  2. If the signal line of the RSItv.ex4 custom indicator breaks above the 50.0 signal line as shown on Fig. 1.1, an exit or take profit is advised.

Sell Trade Example

Fig. 1.1

Free Download

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About The Trading Indicators

The RSItv.ex4 is a custom indicator for MetaTrader4, a smoothed Relative Strength Index that comes with a sound alert upon crossing the 50.0 level (up or down).

The smoothed RSI value is just a Simple Moving Average drawn over a longer timeframe, with a preferred value of 50.

The reducedlagma.ex4 custom indicator is an advanced moving average indicator that eliminates lag, thereby reacting faster to price actions in the market.

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