EMA Crossover Signal Indicator for MT4

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EMA Crossover Signal Indicator

Introduction to the EMA Crossover Signal Indicator

One of the most basic ways traders detect trend reversals objectively is with the use of moving average crossovers. Traders assume a trend reversal whenever a faster moving average line crosses over a slower moving average line, which is the concept that this indicator is based on.

What is the EMA Crossover Signal Indicator?

The EMA Crossover Signal Indicator is a momentum or trend reversal signal indicator which is based on the concept of moving average crossovers using Exponential Moving Averages (EMA).

It plots spring green arrows pointing up to indicate a bullish trend or momentum reversal. Inversely, it also plots red arrows pointing down to indicate a bearish trend or momentum reversal.

EMA Crossover Signal Indicator for MT4

How the EMA Crossover Signal Indicator Works?

The EMA Crossover Signal Indicator uses a pair of EMA lines to detect trend or momentum reversals. It detects bullish reversals whenever the faster EMA line crosses above the slower EMA line. It also detects bearish reversals whenever the faster EMA lien crosses below the slower EMA line. It then plots the arrows to indicate a reversal whenever the moving average lines crossover.

How to use the EMA Crossover Signal Indicator for MT4

This indicator allows users to modify the sensitivity of the indicator’s signals within the indicator settings.

The “FasterEMA” and “SlowerEMA” variables modify the number of bars used to compute the underlying EMA lines. Traders can change these input variables to adjust the sensitivity of the indicator. Traders can use slower moving average lines to lessen the number of reversal signals, including the false signals during choppy market conditions.

How the EMA Crossover Signal Indicator Works

Traders can use this indicator as a trend or momentum reversal signal indicator. Users can interpret the appearance of the arrows as a trend or momentum reversal signal and open trades based on these signals. However, it is best to use these signals in confluence with other technical analysis indications.

Buy Trade Setup

When to Enter?

Open a buy order as soon as a spring green arrow pointing up appears. Set the stop loss on the support below the entry candle.

When to Exit?

Close the trade as soon as a red arrow pointing down appears.

How to use the EMA Crossover Signal Indicator for MT4 - Buy Trade

Sell Trade Setup

When to Enter?

Open a sell order as soon as a red arrow pointing down appears. Set the stop loss on the resistance above the entry candle.

When to Exit?

Close the trade as soon as a spring green arrow pointing up appears.

How to use the EMA Crossover Signal Indicator for MT4 - Sell Trade

Conclusion

This indicator can be a useful trend reversal signal indicator. However, this indicator is preset to use EMA lines that are very fast – 5-bar and 6-bar EMA lines. This combination is a popular combination used to detect momentum reversals fast. However, this combination also produces a lot of false signals during choppy markets. Users can modify these inputs using other combinations and test for more accurate moving average combinations. Moving average crossover signals should also not be used as a standalone trade signal as it is prone to fake signals during ranging markets. Again, it is best used in confluence with other technical indications as an additional confirmation.

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