Profitable trend strategy: paired moving averages (MA) + MT4 templatehurtlockerpro
This is a trending strategy and has simple rules for managing risk and capital, so I advise you to study this strategy in more detail and keep it in your portfolio. The strategy works on all timeframes, for this you need to choose the moving averages according to your needs or temperament: aggressive or passive settings of moving averages. The strategy has clear rules for setting stop loss / lock.
If you don’t have time to constantly sit at your computer or constantly get your phone out to monitor the state of the market, then this strategy is right for you!
This strategy works on all timeframes.
Optimal timeframe: 1 hour
Optimal settings for moving averages (for 1H timeframe):
- first pair (slow): 100 and 50
- second pairs (fast): 21 and 12
What can be seen on the chart and how to interpret it:
- The first pair (slow) shows the global trend. Any crosshairs 100 and 50 indicate a change in trend (should be distinguished when the intersection
- changes the trend
- stops the trend
- false intersection of averages – rather flat
- The crosshairs of the second pair of moving averages (two fast) show the change in movement within the global trend and are the exit point
You need to enter buy/sell when:
- two slow moving averages in the first pair are crossed
- two moving averages in the second pair crossed in the same direction as the averages of the first pair
On this chart, you can safely buy more every time, since in both cases the stop loss is very short. With a strong trend (the distance between the slow averages expands and remains so for a long time). In this case, the purchase has a very high probability of a positive outcome.
The same as in the previous example, only for sale.
In both examples, it is clearly seen that the slow moving averages crossed and for a long time are at a great distance from each other and the distance only increases. This says that the global trend is very strong.
After a while, when the price rolled back, fast moving averages crossed in the slow direction (indicated by red square) – this is a sell signal with the highest probability of a positive outcome.
The idea of using this strategy is very simple: Trend is my friend! It is necessary to wait for the situation when two intersections in two pairs occur one after another. Therefore, you need to wait until the global trend rolls back and continues its movement in the same direction.
For example: moving averages in the first pair crossed down (a downtrend), moving averages in the second pair crossed down (a pullback and continued movement).
The positive side of this strategy is that when the intersection of fast averages formed (usually this is a pullback), then the top / bottom formed, and this is a short stop loss!
You need to exit when the opposite situation arises. That is, if you entered an increase (the intersection of slow and fast averages up), then you need to wait for the fast to cross down (enough to stop only the fast ones to exit).
Exception: when you do not need to enter
The market is an amazing “organism” that changes to wriggle and spin to spin so that it is not clear what is on his mind. Although this is not necessary to know! One must act in this uncertainty and earn, adapt and earn!
Consider controversial cases when this strategy does not need to enter the market.
In case of uncertainty on this pair, it is best to open a new tool and look for an understandable pattern there (which I described above). A clear, understandable and unambiguous pattern can be found on another timeframe of the same pair. Most importantly, you don’t have to go in cycles on one timeframe or instrument and look for a nonexistent pattern. The human brain is easily suggestible, so if you are looking for a pattern where it is not there, you will definitely find it! Make your trading easier: if you do not see your pattern on the chart, it means it is not in this area, look elsewhere!
The phase of movement (trend or flat) is very difficult to determine, especially in the initial stage of formation. However, when the price stands still for a long time, a visible and understandable pattern appears that can be easily decrypted. This is where you need to act.
When not to open an order
- When the slow averages (first pair) are almost horizontal
- At the same time, the fast ones crossed below the slow ones (for an uptrend) and above the slow ones (for a downtrend).
If you still want to open a deal, there may be an exception in this situation:
add stochastic indicator and / or RSI
One or the other indicator (or both) should cross in the overbought / oversold zone and exit the zone. For stochastics, this is zone 20/80, for RSI it is zone 30/70
Do not open a deal to buy in the following case
Do not open a deal for sale in the following case
This strategy is trending, so sometimes it takes a very long time to wait for entry. Therefore, be patient!
If you do not have time to monitor the state of the market, then buy my robot, which will help to monitor the state of the market and, if necessary, open deals. Or just send you a message on your phone with a notification of potential entry.
If you want to get more from this strategy then download this template for free: