Step MA Indicator for MT4

June 8, 2022

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Introduction to the Step MA Indicator

One important factor that seasoned traders look for when making a trade is the direction of the long-term trend. This is because trades that are aligned with the long-term trend tends to produce higher probability trades.

The Step MA Indicator was developed to help traders identify the long-term trend direction based on an Average True Range and Moving Averages.

What is the Step MA Indicator?

The Step MA Indicator is a trend following technical indicator which presents the trend direction as an oscillator.

This indicator plots two lines which oscillate within the range of zero to one. The main Step MA line is a red dot-dot-dashed line. It is then paired with a solid blue violet signal line.

The trend direction is indicated by how the dot-dot-dashed line and the blue line interacts. The trend is bullish if the dot-dot-dashed line is above the solid blue line, and bearish if the dot-dot-dashed line is below the solid blue line.

This indicator can be used as a trend reversal signal indicator based on the crossing over of the two lines. However, it is best used as a trend direction filter wherein traders would trade only in the direction indicated by the Step MA Indicator.

How the Step MA Indicator Works?

The Step MA Indicator has a complex algorithm which shares some similarities with the Stochastic Oscillator. It also incorporates a weighted Average True Range (ATR) within its computation.

The indicator first calculates for the main oscillator line, which is the dot-dot-dashed red line. It then calculates for the signal line, which is the solid blue line, derived from the main oscillator line.

How to use the Step MA Indicator for MT4

The Step MA Indicator has a few variables which can be modified within its indicator settings.

“PeriodWATR” refers to the number of periods used by the indicator to calculate for its oscillator lines. This is the main variable that modifies the sensitivity of the indicator.

“Kwatr” allows users to modify the strength of the oscillations of the two lines.

“HighLow” toggles the use of the high and low price point on or off.

Buy Trade Setup

When to Enter?

Open a buy order as soon as the red dot-dot-dashed line crosses above the solid blue line in confluence with other bullish technical indications.

When to Exit?

Close the trade as soon as the red dot-dot-dashed line crosses below the solid blue line.

Sell Trade Setup

When to Enter?

Open a sell order as soon as the red dot-dot-dashed line crosses below the solid blue line in confluence with other bearish technical indications.

When to Exit?

Close the trade as soon as the red dot-dot-dashed line crosses above the solid blue line.

Conclusion

This technical indicator can be a very useful trend direction filter indicator since its indications are based on the long-term trend. However, it can also be useful as a trend reversal signal indicator as shown on the examples above. It has a very high probability of producing trades with very huge profits since it is geared towards the long-term. However, its signals can also be lagging at times.