The Moving Average Bands forex trading strategy seeks to visually offer traders with a cool way of searching the market for powerful buy and sell signals.
Market enthusiasts can now sit back and watch their charts without the usual panic that clouds the market.
This is truly a strategy that should be in every trader’s toolbox. Let’s get started:
Chart Setup
MetaTrader4 Indicators: MA_BBands.ex4 (default setting), MA_in_Color.ex4 (Input variable modified; MAPeriod=28)
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
Initiate a buy entry if the following indicator or chart pattern gets displayed:
- If the outer bands of the MA_BBands.ex4 custom indicator widens, it is a signal of increased volatility. The blue upward pointing arrow of the MA_BBands.ex4 custom indicator that is aligned below the price bars, further indicates that price is heading upwards i.e. a signal to buy the currency pair of interest.
- If the MA_in_Color.ex4 indicator line intersects the middle yellow line of the MA_BBands.ex4 custom indicator bottom up, a buy trigger is said to be favored.
Stop Loss for Buy Entry: Place stop loss below the lower band or support.
Exit Strategy/Take Profit for Buy Entry
Exit or take profit if the following rules or conditions takes precedence:
- If a red downward pointing arrow of the MA_BBands.ex4 custom indicator gets forms above price bars as shown on Fig. 1.0, it is a signal of weaning bulls power, as such an exit or take profit will suffice.
- If price closes below the line of the MA_in_Color.ex4 custom indicator, it is a convincing trigger to exit or take profit accordingly.
Sell Entry Rules
Initiate a sell entry if the following holds true:
- If the outer bands of the MA_BBands.ex4 custom indicator widens, it is signaling increased volatility. The red downward pointing arrow of the MA_BBands.ex4 custom indicator that is aligned above the price bars, further indicates that price is dipping lower i.e. a signal to sell the currency pair of interest.
- If the MA_in_Color.ex4 indicator line intersects the middle yellow line of the MA_BBands.ex4 custom indicator top downward as shown on Fig. 1.1, a sell order is most appropriate.
Stop Loss for Sell Entry: Place stop loss above the upper band or resistance.
Exit Strategy/Take Profit for Sell Entry
Exit or take profit if the following holds sway:
- If a blue upward pointing arrow of the MA_BBands.ex4 custom indicator gets aligned below price bars as shown on Fig. 1.1, it is a signal of weaning bears power, as such an exit or take profit will suffice.
- If price closes above the line of the MA_in_Color.ex4 custom indicator, it is a considerable trigger to exit or take profit forthwith.
Sell Trade Example
Fig. 1.1
Free Download
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About The Trading Indicators
The MA_BBands.ex4 custom indicator is a mix between an MA channels and Bollinger Bands. It is essentially a signal indicator that deploys the mechanism of the moving averages.
The MA_in_Color.ex4 is an exponential moving average with period 14 and is a trend following indicator that adds more weight to the latest data.