MA Angle Swing Cross Forex Trading Strategy

0
940

MA Angle Swing Cross Forex Trading Strategy

The moving average indicator is one of the most basic, yet most versatile indicator available for traders. However, probably due to its simplicity, many traders tend to overlook its importance, in search of other more exotic ways to assess the market. Little did they know that most indicators are somehow based on moving averages.

The Moving Average Slope

The moving average has many uses. It could be used as a filter to identify the main direction of the trend based on where price is in relation to a moving average. It could be used as a crossover strategy to determine entries. It could also be used to determine retracement areas where price could pull back to.

One way of using the moving average is determining the trend based on the slope. Many have intuitively used this method, but because this is usually a visual basis, traders often overlook the importance of the slope of a trending moving average.

In a nutshell, a flat moving average is usually seen in a choppy market, while a steeply sloping moving average usually indicates a strong trend.

Trading Strategy Concept

This strategy aims to look for entries based on the crossover of price and the 200 Exponential Moving Average (EMA), while at the same time taking into consideration the slope of the medium-term trend.

To identify the slope of the mid-term trend, we will be using the MAAngle custom indicator. It is displayed as an oscillating indicator on a separate window, however it is mainly an indicator which objectively identifies the slope of a moving average. No gimmicks and complicated computations here, it just changes color if the moving average period assigned to it changes slope. If the market is sloping up, it paints lime green histogram bars, while if the market is sloping down, it paints firebrick (brown) histogram bars. However, it also has a threshold before changing to these colors. If the slope doesn’t go over its threshold, then it paints histograms that are color yellow. This indicates that the moving average is not yet steep enough.

The default settings for the MAAngle indicator is set at 50 periods. This usually represents a mid-term trend when using a standard moving average. This allows us to align the long-term trend filter, which is the 200-period EMA, with the mid-term slope, which is at 50-periods.

Indicators:

  • 200-period Exponential Moving Average (EMA) (gold)
  • MAAngle (default parameters)

Timeframe: 4-hour chart only

Currency Pair: any

Trading Session: any

Buy (Long) Trade Setup

Entry

  • Price should cross and close above the 200 EMA (gold) indicating that the market’s long-term trend is changing
  • The MAAngle indicator’s histogram should change from firebrick (brown) to yellow then to lime green printed above the zero midline, indicating that the slope of its assigned moving average is becoming bullish
  • Enter a buy order on the confluence of the above conditions

Stop Loss

  • Set the stop loss below the 200 EMA (gold)

Exit

  • Close the trade as soon as the MAAngle indicator changes to color yellow to exit the trade prior to the actual reversal

MA Angle Swing Cross Trading Strategy 01 MA Angle Swing Cross Trading Strategy 02

Sell (Short) Trade Setup

Entry

  • Price should cross and close below the 200 EMA (gold) indicating that the market’s long-term trend is changing
  • The MAAngle indicator’s histogram should change from lime green to yellow then to firebrick (brown) printed below the zero midline, indicating that the slope of its assigned moving average is becoming bearish
  • Enter a sell order on the confluence of the above conditions

Stop Loss

  • Set the stop loss above the 200 EMA (gold)

Exit

  • Close the trade as soon as the MAAngle indicator changes to color yellow to exit the trade prior to the actual reversal

MA Angle Swing Cross Trading Strategy 03 MA Angle Swing Cross Trading Strategy 04

Conclusion

This strategy is excellent for catching long trends. At times, this strategy could allow for trades that could last to several weeks. This allows traders to maximize profits on a single trade, while maintaining the usual risk used when trading swing trades. At times, this strategy could allow for reward-risk ratios of more than 2:1.

It is also best to use this strategy on the 4-hour timeframe only. This is because the MAAngle indicator would have more color changes on the lower timeframes. This would mean more signals but are of less quality.

Recommended MT4 Broker

  • Free $50 To Start Trading Instantly! (Withdrawable Profit)
  • Deposit Bonus up to $5,000
  • Unlimited Loyalty Program
  • Award Winning Forex Broker
  • Additional Exclusive Bonuses Throughout The Year

Recommended broker

>> Claim Your $50 Bonus Here <<

Click here below to download:

Save

Save



Get Download Access

Get Smarter About Forex Trading Using Indicators

Join 100,000+ subscribers and get our 5 min daily newsletter on what matters in forex.

We do not sell or share your information with anyone.

LEAVE A REPLY

Please enter your comment!
Please enter your name here