How To Use The ind aMU. – indicator for MT4
The ind aMU. – indicator MT4 is one of numerous indicators used in Forex that is not found as a default indicator on your MetaTrader 4 platform. Generally speaking, it shows trends and lateral price movement and it can be used to good advantage, as one of many tools in your trading arsenal.
It does a good job of signaling reversals in price movement, especially when you consult it on a higher time frame, such as the weekly. The chart below clearly illustrates trend reversals, and price crossing over, and closing above or below the ind_aMU. – indicator.
You can also see that where the zig-zaggy lines are big and wide, it is indicative of higher volatility in the market and when you first see the widening of the indicator, that is the time to start looking for trades.
Settings And Parameters For ind_aMU. – indicator
All settings can be used in default mode, there is no need to adjust settings, unless you wish to experiment, as sometimes tweaking the settings can produce a better result, like speeding up the period inputs, to faster settings, to see if it creates a quicker reversal in price action.
If you do that, you should back test to see how well it worked in the past, before you decide to keep custom settings. However, the default mode should be more than adequate to capture accurate moves in the market.
Using The ind_aMU. – indicator With Other Indicators
The ind_aMU. – indicator functions much like a moving average. It is a relatively unknown indicator that works well with other tools you can apply to your chart, such as trend lines, support and resistance. One excellent corroborating means in addition to the ind_aMU, would be to apply a popular moving average that is widely used by traders, such as the 40-moving average. In the chart below you can see that the movement of price follows pretty closely as indicated by both the ind_aMU, and the 40 MA.
You can see where price crosses over on this daily chart with the 40 moving average, the ind_aMU.-indicator is also showing the trend reversal at the crossover point, thus the 2 indicators together work as confirmation for a trend reversal. You would want to consult a lower time frame to look for an earlier entry into the market, so if on the daily chart, look at the 4- or 1-hour chart to pinpoint the earliest entry you can find, once you see the very beginning of a trend reversal.
Using The ind_aMU.-indicator With The Bollinger Bands
The Bollinger bands is a popular tool used by traders to identify when price is moving outside the bands which could signify a strong move, or increased volatility in one direction or the other. The bands also can show price moving in an orderly fashion within the bands, backing up a continuation of trend in a given direction.
You can see how the ind_aMU.-indicator moves exactly in step with the Bollinger band’s 20 moving average, and again, reinforcing the confirmation of a crossover everywhere that it occurs, at which point you can look for a trade to take. If you start with a higher time frame and find an entry on a lower one, make sure all the confirmation you need is there. This way you first confirm the trend, then move to a lower time frame to locate your entry. This is a good way to scalp the market, where you take 10-20 pips per trade.
Using The Parabolic Indicator With ind_aMU To Confirm Trend
The parabolic SAR indicator is utilized by traders to determine a trend, and also upcoming reversals within price action. It uses a method known as "SAR," an acronym for ‘stop and reverse’, to determine good entry and exit points. A sequence of dots is placed both above and below the trend in the currency pair, to indicate the direction price is presently moving. When price is moving down, you’ll see dots placed above price action. When it’s moving up, the dots appear below it.
You can see in the chart example, the parabolic SAR gives you an earlier entry into a trade than the ind_aMU.- indicator does, but the ind_aMU still acts as good confirmation as a crossover point. In the chart shown, you can also see where price does cross below the ind_aMU and then reverses back to the original direction, but the parabolic SAR dots remained as uptrend, so at that point, you would have a conflicting signal and you would not have taken a trade there. Remember, you want to have multiple confirmations for a trend reversal!
Using Stochastics With The ind_aMU Indicator
Another way to confirm price action and reversals, is the use of the Stochastics indicator, found as a default indicator on your trading platform. Stochastics is an oscillator, which means it uses support and resistance areas to determine where price may be reversing.
Therefore, it is used primarily to show overbought and oversold areas which may indicate a directional change. However, it should not be used as a stand-alone indicator, as crossovers can also signal a continuation of a trend, which means you need multiple confirmations.
That’s where an indicator such as ind_aMU or moving average crossovers are needed, for additional confirmation of a reversal. Stochastic settings should be left at default, and it’s important to wait until the candle at the crossover point has closed, before you can be certain you have an actual crossover.
In conclusion, you may want to apply 4-8 indicators to your chart initially, along with the ind_aMU, and see how many of those indicators are in sync with the market, and are accurately ‘describing’ what is going on, are they showing the current trend in action? Are they lagging too much, in other words, do they give the information of where the market is going, too late?
Narrow it down to several reliable indicators that work well together and give you the earliest possible entry into the market. Your crossover indicators used with trend lines and support/ resistance will help you to see the best possible entries. Any trading method should also include trend lines to get a general idea of where the trend is, and, support/ resistance levels applied to your chart, to be used as areas to take profit, as price usually bounces within these zones.