Ultimate Moving Average Forex Trading Strategy

The Ultimate Moving Average forex trading strategy is a mechanical trading system that incorporates the Ultimate MA, Simple Moving Average (55), and the Signal Generator MA Crossing RSI custom indicators.

The strategy works on a wide range of timeframes as detailed below:

Chart Setup

MetaTrader4 Indicators: Ultimate_MA.ex4 (default setting), Simple Moving Average.ex4 (55) (default setting), Signal Generator MA Crossing RSI.ex4 (default setting)

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

Recommended Trading Sessions: Any

Currency Pairs: All forex pairs

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Buy Trade Example

Fig. 1.0

Strategy

Long Entry Rules

Place a buy order if the following indicator or chart patterns are on display:

  1. If the Ultimate_MA.ex4 custom indicator crosses the Simple Moving Average (55) bottom up, while price bars opens and closes above both MA lines, a bullish trend is said to be in focus.
  2. If the line of the Signal Generator MA Crossing RSI custom indicator breaks above the 50.0 signal level as seen in Fig. 1.0, it is an indication that price is going bullish i.e. a long entry is advised.

Stop Loss for Buy Entry: Place stop loss 1 pip below the SMA (55) lime line.

Exit Strategy/Take Profit for Buy Entry

Exit or take profit on position(s) if the following rules or condition holds sway:

  1. If price closes below the lime colored Simple Moving Average (55) line as shown on Fig. 1.0, an exit or take profit is advised.
  2. Observe to see whether the lines of the Signal Generator MA Crossing RSI custom indicator breaks below the 50.0 signal level, it is a trigger to exit or take profit accordingly.

Sell Entry Rules

Enter a sell position if the following chart or indicator pattern gets displayed:

  1. If the Ultimate_MA.ex4 custom indicator crosses the Simple Moving Average (55) top downward, while price bars opens and closes below both MA lines, a bearish trend is said to be in view.
  2. If the lines of the Signal Generator MA Crossing RSI custom indicator breaks below the 50.0 signal level as seen on Fig. 1.1, it is a signal that price is going bearish i.e. a sell entry is advised.

Stop Loss for Sell Entry: Place stop loss 1 pip above the SMA (55) lime 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 lime colored Simple Moving Average (55) line as shown on Fig. 1.1, an exit or take profit is advised.
  2. If the line of the Signal Generator MA Crossing RSI indicator breaks above the 50.0 signal level, it is a trigger to exit or take profit accordingly.

Sell Trade Example

Fig. 1.1

Free Download

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About The Trading Indicators

The Ultimate_MA.ex4 is a modified moving average that computes the weighted average of 3 moving averages (Simple, Exponential, Smoothed or Linear Weighted).

It has been shown to follow trend better than the single moving average and a good alternative to EMA or SMA for traders who don’t like untidiness.

The Simple Moving Average ex4 (55) is much slower, but does keeps us in the trade much longer, thereby eliminating false and short-live price actions.

The Signal Generator MA Crossing RSI ex4 indicator is made up of 2 indicators i.e. Relative Strength Index and Moving Averages.

Their formulas are not combined, but they are both displayed on the same window. The MA crossover produces the purple and blue dots.

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