OsMA MT4 Indicator – Free MT4 Indicator 

 March 28, 2016

By  Advanced Strategies

For this strategy post, we will focus our attention on a powerful indicator called the OsMA MT4 Indicator. Since the OsMA oscillator (Moving Average of Oscillator) is very closely linked to the MACD indicator (actually being a MACD modification), then it does not make sense to consider its signals isolated from MACD, or at least without some exponential moving averages. So we will simultaneously analyze the behavior of both OsMA and MACD under different market situations with the same default settings.

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OsMA MT4 Indicator Trading Rules

OsMA MT4 Indicator Buy Signal
To enter the market with a long position, you should look for the OsMA histogram to cross its zero level in the upward direction, from bottom to top. Further growth of the oscillator bars tells us about the strengthening of the bullish trend.

If at this point we look at MACD, the parameters of which are set exactly as the OsMA’s ones, we see that the MACD histogram crosses its signal line in an upward direction.

OsMA MT4 Indicator Buy Signal

OsMA MT4 Indicator Buy Signal

You can enter the market after 3 candlesticks following the OsMA crossing. Once the fourth candlestick starts, you can open the long position. For this particular strategy using the OsMA MT4 Indicator, it is best to use the Risk Reward Ratio 2/3, so you should set the Stop Loss order at 20 pips distance and the Take Profit at 30 pips.

Later, when the distance between the MACD and its signal line decreases, the growth of OsMA bars also slows down and begins to decrease. The gradual drop of OsMA MT4 indicator histogram is a sign of weakening uptrend and a signal to close the position manually in case it didn’t get close to Take Profit level.

OsMA MT4 Indicator  Sell signal
The signal for entering the market with a short position will be the reverse situation, namely when the OsMA histogram crosses its zero line from top to bottom. If afterwards the OsMA bars continue to increase in size downwards, it confirms an emerging bearish trend.

At the same time, you should watch the MACD and you will see that its histogram also crosses the signal line downwards.

OsMA MT4 Indicator Sell SignalOsMA MT4 Indicator Sell Signal

You should enter the market after 3 OsMA downward bars following its crossing, or in other words, 3 candlesticks after the signal. As in the case of the bullish trend described above, the Sell position stop orders should be set considering the 2/3 ratio: Stop Loss at the level of 20 pips and Take Profit at the level of 30 pips.

First, the distance between the MACD and its signal line will grow (as shown in the chart above), causing OsMA bar distance to grow as well. But, after a while, the MACD will gradually approach its signal line, which shows a weakening of the downward trend. If you see that the price cannot reach the Take Profit level and the bearish trend is weakening, you can consider closing the position manually.

It is important that we mention that using the OsMA MT4 Indicator may produce quite a fare bit of false signals. To reduce their number, it would be helpful to use any trend indicator, like ADX. This will help you to avoid trading against the trend and identify favorable market entry points after corrections.

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.

OsMA Strategy Video

How to Trade with OsMA MT4 Indicator

OsMA 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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