Forex Cloud MT4 Indicator – Free MT4 Indicator 

 March 21, 2016

By  Advanced Strategies

The Forex Cloud MT4 Indicator looks quite similar in appearance with the Ichimoku Cloud but with less moving averages and it’s a smoothed “version”. In comparison with the Ichimoku Cloud, the Forex Cloud MT4 Indicator eliminates a lot of the noise and the trend can be spotted much more easily. Usually this type of indicators is more popular with the Japanese traders and it’s part of the reason why the Yen pairs suit more to the Forex Cloud MT4 indicator, but it’s also amazing at following most major Forex pairs as well.

The Cloud is designed to serve as support and resistance levels, but at the same time, it can gauge the trend direction, the strength of the trend and above all it can also be used as a trading signal. The Forex Cloud MT4 indicator will ensure that you’re always on the right side of the market as it really does a good job in spotting the dominant trend. The Forex market spends 75% of the time consolidating and there is no trend and to some extend the Forex Cloud MT4 indicator will detect those market conditions as well because you’ll see the price trading very close to the cloud and move back and forth above and below the Cloud which turns from bullish to bearish and vice versa many times during the consolidation stage. During those times, it is advised to stay aside off the market and wait for a clear breakout either direction and the Cloud should extend in that direction gauging the momentum.

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Forex Cloud MT4 Indicator – Trading Rules

In the chart below, we have a visual representation of the indicator itself.The white line is a shorter moving average, while the cloud is represented by several layers of moving averages, which turns from green, which indicates a bullish trend, to red, which indicates a bearish trend and vice versa. The Forex Cloud MT4 indicator can be used as a trading system in and of itself without the need of using other indicators.

Forex Cloud MT4 Indicator - Trading Rules

Forex Cloud MT4 Indicator – Trading Rules

Going forward, we’re going to learn a simple strategy that will help us catch the 1H and 4H trends. Since we already learned that the Forex Cloud MT4 indicator performs better with the Yen pairs, we’re only going to trade the USD/JPY with this strategy. The rules of the strategy are quite simple if the price is above the Cloud (the Cloud needs to turn green as well) we’re only looking for buy setups and if the price is below the Cloud (the Cloud needs to turn red as well) we’re only looking for sell setups.

In order for a short trade to be triggered we need two conditions to be satisfied: first, we need the white moving average to shift below the cloud and secondly, we need to see price breaking from the above, crossing below the cloud with big bold candles preceded by strong momentum breakout because this is indicative of a real shift in the trend. And vice versa the same rules can be applied for a long trade.

A protective stop loss is always used in the opposite direction of your trade above/below the extreme of the Cloud. Since we’re trying to be in the trend for as long as possible, we’re going to take profits at the first sign of price reversal and once the market breaks in the opposite direction of the Cloud and once it close above it, we take our profits off the table.

Forex Cloud MT4 Indicator – Trading Rules

Before entering any trades we have to wait for at least two retests of the channel boundaries and in order to maximize the rate of success we’re going to only enter once we break below the middle line of the channel with a stop above/below previous high/low and targeting the opposite side of the channel.

Trading with Forex Cloud MT4 IndicatorTrading with Forex Cloud MT4 Indicator

The 4H USD/JPY trading chart above is an example of a valid short trade setup using the Forex Cloud MT4 Indicator. Once all the conditions are met for a valid short trade we can see that the market went straight in our direction with almost non-existent drawdown and above all we managed to catch almost the entire downtrend.

Forex Cloud MT4 Indicator - Bullish SignalForex Cloud MT4 Indicator – Bullish Signal

In the above Bullish setup, we have once again all the conditions for a valid long trade setup and we can see the power the Forex Cloud MT4 Indicator at work. The trading signals generated by the Forex Cloud MT4 Indicator are very accurate and once we’re in a trade you will almost inevitably be in a profit which ultimately will be another factor in judging the quality of the trade signals.

Time Frames

Technically speaking, you can use this indicator for all time frames. However, the shorter the time frame, you will see more fluctuation and possibly more whipsaw which may cause small losses that can eat up your portfolio quickly. We recommend that you use higher time frames like the 4H for better consistency.

Forex Cloud Strategy Video

Forex Cloud MT4 Indicator Video

Forex Cloud MT4 Indicator Download

We have provided this powerful trend trading indicator to you at no cost. We humbly request for your help to spread the word by sharing on one of the social platforms below. To unlock the download link, you just need to share this page to help us achieve our goal of helping more traders out there.

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Leave us a comment below to let us know your thoughts on this indicator. If you like this indicator, you might like see other indicators that we have carefully selected that will help you in your trading journey.

And if you can, you really should invest in a proven MT4 Expert Advisor to help you generate some profit on full autopilot.

We highly recommend this powerful MT4 Expert Advisor.

Visit our Free MT4 Indicator Download page.

We hope you have enjoyed this post as much as we have creating it. Good luck and thank you for your readership.

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