MODIFIED MOVING AVERAGE MT4 INDICATOR
Watch the testing video here:
MODIFIED MOVING AVERAGE MT4 INDICATOR
Modified Moving Average MT4 indicator — is a straightforward but visually informative forex indicator based on the standard moving average. It draws a modified forex moving average directly in another window of the trading chart. This indicator is available for MT4 versions of the Meta trading platform.
In Normal Moving Average, It sums up the last p price and divides the summation by the p (number of samples). Instead, if we divide the summation by the value of the last price (e.g., the close price of the last candle), then we have an oscillating MA:
Where c0 is a constant to shift the result toward zero (c0 is set to p).
Example and strategy
- For the best accuracy and utilization, it is suggested to use this indicator in the 1-Minute time frame and for scalping or day trading.
- The indicator is best to use in divergence conditions. When the indicator shows divergence, I find that the 1-Minute trend (and sometimes hourly trend) reverses soon or the price holds at that level (i.e., waiting for divergence and trading in the direction of the hourly movement are vital).
- Regions between 0.1 ~ 0.15 (selling region) & -0.1 ~ -0.15 (buying region) are of concern when default options are set (period = 90 in 1-Minute time frame). Rarely the indicator approaches 0.2 and -0.2 and beyond.
- Attention to the support and resistance zones and trend lines would help the trader for better entry and exit points.
- In a short trend, pullbacks from level “0” may be the initial of consequent waves to reach higher highs or lower lows, and trade the pullback (from 0) in a trend seems a safer trade.
The MT4 Indicator system isn’t a standalone trading indicator. This indicator can be handy for your trading as additional chart analysis, to find trade exit position (TP/SL), and more. While traders of all experience levels can use this system, it can be beneficial to practice trading on an MT4 demo account until you become consistent and confident enough to go live. You can open a real or demo trading account with most of MT4 Forex brokers
