Multi Timeframe Moving Average Indicator For MT4
The Multi Timeframe Moving Average Indicator For MT4 displays a 20 period Simple Moving Average for the selected time frame. This can help traders analyze price trend on a higher or a lower time frame.
Trading ideas with the Multi Timeframe Moving Average Indicator For MT4
This multi-timeframe indicator can be seen as both a productivity tool and also as a technical analysis trading tool. Its productivity prowess is realized through the power to be able to analyze the market on other charts (lower or higher time frames) without having to leave the current time frame. This is a major plus in terms of convenience and also technical analysis. By remaining on one chart I simply gain trend confirmation based on the higher timeframe without ever having to depart from the current chart. It just makes your technical analysis life a lot easier.
When you load the technical tool into your chart you should come across a blue moving average. You should be mindful of its default settings as this indicator comes with the simple moving average calculation and a period of 20 as preset parameters.
The 20 Moving average is a great one to use so I am not going to change that at all - however, the only thing that I am going to change is the method. As mentioned before, it is using the simple moving average method. I can choose to use an exponential moving average, linear weighted moving average, or a smoothed moving average method. These methods work well but I am going to go with the exponential moving average.
Multi Timeframe Moving Average Indicator For MT4 - Confirming Market Bias For Possible Entries
After selecting the EMA method, I then ensure that I change my chart to the time frame on which I will be executing my trades. Remember it is a multi-timeframe indicator so there is no requirement for me to flip up and down between charts just to conduct my analysis - I simply do it from my current time frame. For this example, I shall be using the fifteen-minute chart. Of course, you can use other time frames that best suit your analysis and trading style but I like the fifteen-minute chart because I get to see both short-term and medium-term trading opportunities. The picture below shows you that I am in the fifteen-minute chart - in fact, I will add in two more other pictures just to illustrate to you something of importance for this exercise.
In all the pictures you will draw one commonality amongst them - in every picture taken you can see that the market is trading above the EMA in all three instances - 15-minute time frame, hourly time frame, and daily time frame. This confirms to us that the market sentiment is definitely bullish. However, we cannot just buy yet as you can see (in the daily time frame) that the market has formed a triple top. The third top has reached a resistance zone defined by the 2 initial tops hence why there is not much momentum in the market however, it is still a critical point we are in.
Multi Timeframe Moving Average Indicator For MT4 - Sell or Buy
In this buy and sell conundrum that we currently find ourselves in - we need to be careful in the way in which we go about our buying and selling business. This conundrum is attributed to the fact that we have a triple top formation in a strong bullish market. So the best way forward for us is to validate the triple bottom trade - that is a sound point to start on. What you could do is add an oscillator indicator at the bottom of the screen. You could use an RSI, Stochastics oscillator or even a MACD. The MACD is one of the best tools in the business when it comes to drawing out regular divergence structures.
In our case, we looking for a sell trade setup based on the completion of the triple top. Bearish divergence - regular bearish divergence - would offer us a strong basis on which to execute our short trade. The risky trade would be the one that takes place right at the very top of the third top. It is risky but most rewarding. Or what we could do is wait for the triple top to complete - that will occur when the market price matches the level of the baseline of the triple top (around 106.145).
You are actually spoiled for choice here - you can take the risky short trade and set a target at 106.145 and then if the market continues to trade further down then you can open a buy position around the 106.080 region. This level is crucial because this is the region where the daily 20-EMA is most likely to offer us support for buying in a strong bull market.
The above method is not a method that is cast in stone - however it is still a flexible trading procedure worth following as this system will allow us to accommodate natural market activity which translates into price patterns, resistance and support levels being formed.