SMA Signals Forex Trading Strategy

The foreign exchange market is a niche that is rigorous and also challenging, but one of the surest ways in which such intricacies can be dampened is via a reliable trading strategy.

The SMA Signals forex trading strategy is designed to take the stress off trading, while ensuring that traders are more confident when they initiate buy/sell trading position(s).

Chart Setup

MetaTrader4 Indicators: SimpleMovingAveragesSignals.ex4 (variable modified; FasterSMA = 4, SlowerSMA = 12), sinTrend.ex4 (default setting)

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

Recommended Trading Sessions: Any

Currency Pairs: Any pair (preferred maximum spread: 5 pips)

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Buy Trade Example

Fig. 1.0

Strategy

Long Entry Rules

Enter a buy in the market if the following indicator or chart patterns are on display:

  1. If the spring green upward pointing arrow of the SimpleMovingAveragesSignals.ex4 custom indicator is aligned below price bars as seen on Fig. 1.0, price is said to be pressured upwards, hence a trigger to buy the asset .
  2. If the yellow histograms of the sinTrend.ex4 custom indicator aligns above the 0.00 signal level, it is an indication that price is being pressured upwards i.e. a trigger to buy the fx pair of interest.

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

Exit Strategy/Take Profit for Buy Entry

Exit or take profit if the following rules or conditions hold sway in the market:

  1. If a red downward pointing arrow of the SimpleMovingAveragesSignals.ex4 custom indicator forms above price bars as illustrated on Fig. 1.0, price is said to be losing its bullish momentum, hence an exit or take profit is highly recommended.
  2. If the yellow histograms of the sinTrend.ex4 custom indicator realigns to form below the 0.00 alert level, bullish pressures is aid to be halting, thereby giving way to likely exit or take profit scenario.

Sell Entry Rules

Enter a sell in the market if the following indicator of chart pattern takes center stage:

  1. If the red downward pointing arrow of the SimpleMovingAveragesSignals.ex4 custom indicator is positioned above the candlesticks as depicted on Fig. 1.1, price is said to be pushed somewhat downwards i.e. a signal to sell.
  2. If the yellow histograms of the sinTrend.ex4 custom indicator aligns below the 0.00 signal level, it is an signal that price is being pushed downward i.e. a trigger to sell the fx pair of interest.

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

Exit Strategy/Take Profit for Sell Entry

Exit or take profit if the following rules or conditions hold sway:

  1. If a spring green upward pointing arrow of the SimpleMovingAveragesSignals.ex4 custom indicator positions below the candlesticks as depicted on Fig. 1.1, bearish momentum is said to be halting, hence an exit or take profit is highly recommended.
  2. If the yellow histograms of the sinTrend.ex4 custom indicator realigns to form above the 0.00 alert level within its indicator window, it is an indication that the bearish sentiment in the market is weaning, hence an exit or take profit will suffice.

Sell Trade Example

Fig. 1.1

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About The Trading Indicators

The sinTrend.ex4 indicator was created by Nikolay Kositsin, in 2005.

This indicator can be used on intraday time frames as well as for long term trading.

The yellow histograms within the indicator’s window either aligns below or above the 0.00 signal level.

The SimpleMovingAveragesSignals.ex4 is a trend indicator that is based on the simple moving average.

It has a 9 and 18 default values for the faster SMA and slower SMA respectively.

Howbeit, for the sake of the strategy being discussed, we modified those values.

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