MACD, MOVING AVERAGES, AND TREND OSCILLATOR: THREE TOOLS FOR YOUR POTENTIAL PROFIT

This strategy will help you create a trading system, analyse market trends, and understand price movements easily.

Timeframe: all

Currency pairs: all

Market state: trending

Required indicators:

  • Fast exponential moving average (4-period EMA)
  • Slow exponential moving average (10-period EMA)
  • Standard Moving Average Convergence-Divergence indicator (MACD, 12, 26, 9)
  • Trend Oscillator: either Average Directional Movement Index (ADX, 14) for Metatrader 4/5 or Directional Movement (DMI, 14,14) for Trading View.

Use the following recommendations to choose the correct entry point for your trading positions.

Entry conditions for a short position (Sell):

1. 4-EMA is below 10-EMA

2. MACD is below zero

3. (–DI) has crossed above the (+DI).

Stop Loss (SL)

Place SL above the previous swing high.

Take Profit (TP)

Take your profit when the 4-EMA rises above the 10-EMA.

Entry conditions for a long position (Buy):

1. 4-EMA is above 10-EMA

2. MACD is above zero

3. (+DI) has crossed above the (–DI)

Stop Loss (SL)

Place SL below the previous swing low.

Take Profit (TP)

Take your profit when the 4-EMA drops below the 10-EMA.

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