.st0{fill:#FFFFFF;}

SMA Crossover MT4 Indicator – Free MT4 Indicator 

 April 26, 2016

By  Advanced Strategies

The SMA Crossover MT4 Indicator is based on the crossover of the faster 9-day simple moving average over the slower 18-day simple moving average to determine a new trend for the asset and therefore provide basis for a reversal trade. It’s simple and easy and most importantly, it keeps you on the right side of the trend.

[sociallocker id=”7719″] SMA Crossover MT4 Indicator + Claim Your FREE USD30 [/sociallocker]


SMA Crossover MT4 Indicator Trading Rules

The SMA Crossover strategy produces a lot of false signals. This is not unique to the indicator as moving average crossover signals with just two moving averages always require confirmation so as to not make a false entry. The strategy here therefore is to allow the indicator arrow to appear on the charts. To prevent any chance of repainting, it is always best to allow the signal candle to form before making the entry on the next candle. This is the only way to ensure that the indicator arrow has displayed its true colour on the chart.

Once the indicator arrow has appeared (green, up arrow for buy or red, down arrow for sell), get confirmation from the colour of the histogram bar of the MACD indicator before deciding on the entry.

SMA Crossover MT4 Indicator – Long Trade Entry Rules

A long trade entry is made when the following setup is displayed on the chart:

  • A green arrow which points upwards has appeared under a candle. This corresponds to a crossover of the 9-day SMA above the 18-day SMA. The candle here is the signal candle.
  • The next candle is the entry candle. If the histogram bars of the colour-coded MACD show blue, this is a confirmation to go long when this candle opens. The trader should setup a BUY order using the open price as the entry price.

SMA Crossover MT4 Indicator - Buy Signal

SMA Crossover MT4 Indicator – Buy Signal

In this chart, two areas where long trades can be setup are shown. This trade was taken from an H4 chart which is the best time frame for this strategy as it eliminates a lot of false signals and the areas where the market moves sideways and therefore does not produce much profitable movement.

Stop Loss and Take Profit Settings

Due to the fact that for this strategy, there are no defined support or resistance lines, it is important to setup the stops at appropriate areas. The trader should look at the prior 6 candles and place the stop loss at a price level which is lower than the lowest low within that candle set. This is what has been done for the chart example.

The Take Profit point will naturally be at the next key area of resistance. This is however ill-defined. As such, the trader should look at previous candle highs and use this as a benchmark for setting the TP points. As is seen in this example, the second TP area is plotted at the same horizontal resistance level as the first TP level.


SMA Crossover MT4 Indicator – Short Trade Entry Rules

A short entry is made when the following setup occurs on the charts:

  • A red, down-pointing arrow appears on a candle to indicate where the 9-day SMA has crossed below the 18-day SMA. This is the signal candle.
  • Check to see that the MACD bars are red when the arrow appeared on the signal candle. Next, initiate a short trade when the next candle (entry candle) opens. This is done by using a MARKET SELL order. If the price is bouncing off the red SMA, then this further reinforces the signal.

SMA Crossover MT4 Indicator - Sell SignalSMA Crossover MT4 Indicator – Sell Signal

Stop Loss and Take Profit Settings

Again the lack of a defined resistance makes it difficult to set tight stops. The highest price of the last 6-7 candles can be used as a benchmark to set the stop loss. The stop loss is set above this area so that retreating prices do not trigger it and kill off potentially successful trades.

The Take Profit point will naturally be at the next key area of support. For this chart example, we use an area where several candles have tested. (see how the green TP Line crosses the price lows in question). Apart from this method of setting the TP, a trailing stop can also be used.


Precautions when Trading with the SMA Crossover MT4 Indicator

The strategy tends to fail when the market is range-bound. As there is no way of knowing when this will happen as live trades are going on, the trader can only use the parameters spelt out above to see if the trade can play out according to plan. The success rates of this strategy can be improved by further backtesting and optimization on MT4 charts.

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.


Trading with SMA Crossover Video Tutorial


Trading with SMA Crossover Strategy


SMA Crossover 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.

[sociallocker id=”7719″] SMA Crossover MT4 Indicator + Claim Your FREE USD30 [/sociallocker]

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.


Claim Your $60 No Deposit Bonus Here

All you need is to have your live account verified!
Of course, you need to open a live account...

2 Brokers that we like A LOT!
USD30 from each Forex Broker Below.
Both Forex Brokers have excellent rating!

Broker #1

Broker #2

We use both of these brokers and proudly promote them!

NOTE: Not all countries qualify for these bonuses. Terms and Condition Applies.

Other Analysis Today

Advanced Strategies


Your Signature

related posts:


AUD/USD Daily Price Forecast – 23rd May 2024


USD/JPY Daily Price Forecast – 22nd May 2024


AUD/CHF Daily Price Forecast – 21st May 2024

Leave a Reply:

Your email address will not be published. Required fields are marked

    1. Almost all the Indicators are locked and will only open by using one of the social buttons.
      Perhaps you can let us know which strategy specifically interest you… we will just drop the direct download link for you.

  1. Hello

    After login with social media site Indicator wasn’t download. why this problem creat?
    is it’s spam web site or not? no file is open and no indicator found.

    Arvind

{"email":"Email address invalid","url":"Website address invalid","required":"Required field missing"}

Get in touch

Advanced Forex Strategies