MA_BBands_YXF Indicator For MT4
The MA_BBands_YXF Indicator For MT4 combines Moving Average channel and Bollinger Bands to generate short term trading signals. Long trades are indicated by upward pointing Blue arrows, while shorts are suggested by downward pointing Red arrows.
Trading ideas with the MA_BBands_YXF Indicator For MT4
This indicator, as suggested by its name or title, uses the metrics of moving averages and also Bollinger bands to generate buy and sell signals. The image below shows the default representation when it has been loaded into my trading screen.
However, the way it looks does not complement my trading chart or the color of my chart because the Bollinger bands are not visible. That is because both the Bollinger band color settings and the trading background are white in color.
So to change this I will change the colors to a darker color so that the Bollinger bands and even the moving average line can clearly be seen by the trader as indicated below.
That makes a huge difference - so now we can clearly see what the full representation of the indicator looks like in reality. All I did was change the colors of the moving averages and the Bollinger bands, and I kept the color of the background as is. With this in order, we can go on to explore some possible trading opportunities with the use of the indicator.
MA_BBands_YXF Indicator For MT4 - Buy Entries
If you look real close at the previous images you can see that the signals are generated whenever the market or price action protrudes outside of the Bollinger bands. The red arrow means we should sell and the blue arrow means that we should buy. But we do not just jump into these trades without fully analyzing the market so that we can get a proper confirmation in support of the signal generated.
You can use this indicator to draw trendlines. These trendlines are used to channel the majority of the price action within the period of a downtrend or an uptrend.
As you can see I connected a few red arrows to draw the resistance line of the downtrend and the blue arrows were connected to draw the support line of the downtrend. You do not have to connect a lot of arrows. The last arrow in the screen is a red arrow which indicates a sell but it would not be ideal to just rush into a sell trade just yet.
We are looking for buying opportunities. Yes I do acknowledge that the market is still trending downward but the market could turn around and go to the upside of the trend.
If we were to go longer we would have to wait for a double bottom pattern to form after several hours or a day. If that pattern forms then we have a good motive to buy. A double-bottom is one of the most respected reversal patterns in the market so it would definitely coincide with our buying-outlook.
MA_BBands_YXF Indicator For MT4 - Sell Entries
If we desire to go short then we would not commit to the trade for a long time as forecasted in the picture below. If anything, the best thing to do is to go down to the lower time frame such as the 15-minute or 5-minute time frame and then look for sell trading opportunities.
These trades are valid for the short-term but beyond that, it will become a risky trade because the bears could be faced with a lot of bullish pressure in anticipation of a double-bottom being formed. Therefore, do not commit to this short trade beyond the close of the New York session.
MA_BBands_YXF Indicator For MT4 - Conclusion
This indicator is an excellent indicator to use for all forms of trading - short-term, medium-term, and long-term. The signals generated by the indicator are of fairly good quality however we should not follow-through with these signals blindly. I say this because we need to take a deeper look into the market to validate the signal generated by the indicator.
If a red arrow is given - we do not rush to open a sell trade - we go deeper into the analysis of the trade and find out what is most likely to occur in the short-term, mid-term or long-term. Once that has been deduced then we can look at finally opening the trades. In the examples given above, I even went as far as to use the indicator to draw trend lines. These trend lines were channels formed by simply connecting a string of red and blue arrows to form the resistance and support lines of the trends.
These trend lines gave you a clear visual of what is happening in the market and it also served as a tool to identify possible exhaustion points where the market might turn around and form a reversal. All in all - this is a tool that you must use to your advantage therefore do not undermine its potential.