MA Channel Close AD Strategy For MT4
Table Of Contents:
Please note: This strategy was publicly published in the trading community and is free to use. We do NOT make an attempt to decide if this strategy is profitable or not, because we know that the major factors regarding trading results are the skills/experience of the trader who executes the strategy. Therefore, we are mainly explaining the components and rules of the strategy. If applicable, we are highlighting advantages, disadvantages and possible improvements of the strategy.
The MA Channel Close AD Strategy For MT4 is a simple strategy yet used by thousands of professional traders. The reason behind the rising popularity of this indicator lies within the simplicity of the use. If you take a close look at the indicator settings, you will be able to learn about the key market dynamics.
Ma channel close A, MACD 2 line, FTP EMA 100, and other variables are used to complete the template. While using the template, the traders don’t have to think about the different settings. In most cases, it becomes a complicated task while using a new system as the traders are not used to different settings of the indicators. But there are some certain rules for using this trading method or tactics.
For instance, investors have to use the system to take the trades in specific hours. The system is designed to open trades in EURUSD, GBPUSD, AUDUSD and USDCAD pairs only. The reason to choose these four assets is price stability. However, the investors who have fairish knowledge about the price action methods can use different tactics to take the trades.
Usually, it becomes a big challenge for the investors to survive as they don’t know how to select the time frame and asset. But for this method, you know your desired trading instrument. Regarding the time frame, the trades should be taken from 1 hour and above chart. Let’s see how we can deploy this system and take the trades at the above mentioned four instruments.
Long trade setup
We will learn to open the long trade with the trend. The trend trading methodicalness is always very profitable as it gives the trades a clear clue to open the trades with low risk. For identification of the trend, the steps of the MA channel is used. The MA channel will work as a perfect place to open the buy and short trade.
Moreover, we have the EMA 100 that will play as a strong support level. The gradient of the EMA 100 will be pointing north that means the price will go for a new high. For the long trade, we need the price to test the 100 EMA. Note that the EMA must match with the red steps of the MA channel. If not, you have to ascertain the bullish price action signals.
After that, you should spot the diamond-like pattern in blue color. You need a minimum of three diamond patterns to confirm the rejection is perfect for long. At the MACD, the saphire line will cross over the red line indicating the bulls have established a firm ground on the price. Open your long trade with a stop-loss beneath the bullish pin bar or PA bar.
The take profit should be assessed with the help fo resistance level. To ease the things, you can find the take profit or TP by multiplying SL or the stop loss with the number 2 so that you have a 12:2 risk to reward (R:R) ratio for the trade setup.
Short trade setup
For the short trade, we will learn to open the trade versus the trend. That means the price has to break the 100 EMA. Breaking the 100 EMA in the hourly chart means, the bears have entered the market. But most of the time, the price will find support and MA channel support.
But if the EMA color changes to brown from red, you can expect the price will again fall. Look at the color of the diamond pattern. If it is brown, you have a strong setup to short the asset. Set the pending sell order at the 100 EMA and the stop loss will be 25 pips for this reversal method. Before setting the sell limit order, you have to see the sapphire line below the red line.
This bearish cross is the perfect indication that gives us then the authority to sell the asset. The advanced traders often incorporate the chart pattern with this method to trade the reversal. The use of chart patterns in trading the reversal is a very efficient way to earn more money. It might seem to bedevil but once you discover to trade with the key dynamics, you will feel the importance of chart pattern trading guide.
However, you have to memorize the chart pattern in a demo platform so that you don’t lose much money. If you stay focus and trade the market with discipline, it won’t take much to understand the grandness of chart patterns in this method.
Note that the breakout of the chart pattern will also result in the color change of the EMA. If not, you might have a false breakout, and taking the trades on such setup will be an immature act.
Trade management technique
There are two basic methods of managing the trades with this system. If you wish to take the trade with the trend, you should use the PA to find the stop loss. In case, the reversal trading method is preferred, in that case, the stop loss is just 25 pips. No matter which method you chose, you should be careful enough to limit the risk in the trades.
The aggressive mentality and hidden hope to win most of the time impose a threat to your career. Being a new trader, your maximal risk per trade should never go past 1%. Break this rule and you will be at great risk and it will be grueling to recover the losses. Considering the safety issue, the elite traders love to use this method with less than 1% risk.
And they are aware of the impact of the major news. Though we will take trades in 4 major assets with this method, we can impose the same rule to trade other instruments. But to take the trades in other instruments, we must learn to focus on the core dynamics of the market.
In case, you take the things in a very drastic way and increases the risk over 5% just to make more money, you can get ready to blow up the account. Safety should be the main concern while using this trading method. Remember, every system has some flaws. You must get with such flaws and take open orders with low risk.
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