"Trade the trend!" "Buy cheap, sell expensive!"
You would often hear these words of wisdom from experienced traders. But how do you deal with the trend and buy cheaply and sell expensive at the same time? How do you make sure you don't chase the price? Trend traders are notorious for making the mistake of tracking the price. The answer is retracement.
Retracements are the temporary price declines in a trendy market environment. Although the price tends to be one-way in a trendy market environment, the price always has cases where the price pauses for a while and pulls back a bit before resuming its trend. This is caused by traders who have already made some money with a trend that is already making or blocking some profits. This causes the price to drop a bit. This is one of the most logical points to start a trend. You can trade the trend while getting started with a discount.
The Real MACD Bounce Forex trading strategy is one that sticks to this idea of trading pullbacks. This is done using a custom MACD indicator and moving averages.
Guppy multiple moving averages
Moving averages is probably the most widely used technical indicator among many traders. This is because moving averages have many uses. It can be used as a trend indicator, crossover strategy, trend filter, etc.
One way to use moving averages is to identify likely trace entry points. This is because moving averages also act as dynamic supports and resistors. Since moving averages are the average of the price, in a trend market condition, prices near the moving average range could be considered as a discount. Many traders tend to go in the direction of the trend when the price falls back to a moving average. As a result, the price would tend to bounce off a moving average, which would normally lead to a resumption of the trend.
The Guppy Multiple Moving Averages uses two sets of multiple moving averages. The first set of moving averages is colored green. This is the slower set of moving averages and represents the long-term trend. The second set of moving averages is colored red. This set is the faster set of moving averages and represents the short-term trend.
Moving Average Convergence and Divergence (MACD) is one of the most popular technical indicators available. In fact, it is a staple for most trading platforms and chart software.
The MACD is an oscillating indicator based on the difference between two moving averages and another moving average that is considered a signal line. In a way, the MACD is a derivative of a crossover strategy.
MACDs are very popular for determining trends because of their effectiveness. However, it is often viewed as a lag indicator. It tends to react a little later than some indicators.
However, the Real MACD is a modified version of the standard MACD indicator. The Real MACD tries to reduce the delay in the standard MACD version, which makes the use even more powerful.
Trading strategy concept
This strategy is a simple strategy to continue the trend based on the Guppy Multiple Moving Averages and the Real MACD.
The Guppy Multiple Moving Averages serve both as a trend filter and as an area that we can use for our entries. The trend direction is based on how the sets of moving averages are stacked. With an upward trend, the faster moving average set should be above the slower moving average set. On the other hand, the faster set of moving averages would be below the slower set during a bearish market. Trading entries should correspond to the trend direction of the guppy multiple moving averages.
The second use of the guppy multiple moving averages would be a dynamic area of support and resistance. Once the trend direction is set, we will use the red quantity or short-term moving trend averages as an area where we look for possible deviations from the average price. During a trendy market situation, we are waiting for the price to return to this area. If the price visits the area again, we will look for possible deviations from the moving averages.
The Real MACD would be our entry trigger. During the tracing phase of a strong trend, the Real MACD would temporarily reverse. When the price picks up the red guppy multiple moving averages again, the Real MACD will return to its original direction in line with the long-term trend. Viable entries are taken into account as soon as the Real MACD moves towards the long-term trend.
Time window: preferably 1 hour, 4 hour and daily charts
Currency pair: Only major and minor pairs
Trading session: Meeting in Tokyo, London and New York
Buy (Long) Trade Setup
- The price should be above the green set of multiple moving averages
- The red set of multiple moving averages should be above the green set, indicating a bullish long-term trend
- Wait for the price to go back to the red set of multiple moving averages
- The Real MACD should have negative histogram bars that indicate the tracking period
- Enter a buy order as soon as the Real MACD prints a positive histogram indicating the possible resumption of the upward trend
- Place the stop loss under the red set of multiple moving averages
- Close the trade as soon as the Real MACD prints a negative histogram
Sell (Short) Trade Setup
- The price should be below the green set of multiple moving averages
- The red set of multiple moving averages should be below the green set, indicating a declining long-term trend
- Wait for the price to go back to the red set of multiple moving averages
- The Real MACD should have positive histogram bars that indicate the tracking period
- Place a sell order as soon as the Real MACD prints a negative histogram indicating the possible resumption of the bearish trend
- Set the stop loss above the red set of multiple moving averages
- Close the trade as soon as the Real MACD prints a positive histogram
This strategy is an excellent strategy to continue the trend. The overall picture of the trend direction is clearly identified by the indicator Guppy Multiple Moving Average from short-term to long-term. Aligning the short-term trend with the long-term trend ensures that we are trading a strong trend. The Real MACD, on the other hand, enables us to trace deeper tracks.
This strategy can best be combined with a breakout of diagonal supports and resistances that normally coincide with the return. A certain knowledge of price promotions and the behavior of the price during the return would also be an advantage.
Installation instructions for forex trading strategies
The real MACD Bounce Forex trading strategy is a combination of Metatrader 4 (MT4) indicator (s) and template.
The essence of this forex strategy is to transform the accumulated historical data and trading signals.
The real MACD Bounce Forex trading strategy offers the opportunity to recognize various peculiarities and patterns in price dynamics that are invisible to the naked eye.
Based on this information, traders can accept further price movements and adjust this strategy accordingly.
Recommended Forex Metatrader 4 trading platform
- Free $ 30 to start trading immediately
- Deposit bonus up to $ 5,000
- Unlimited loyalty program
- Award winning forex broker
Click here to get the XM Trading Account Opening Guide step by step
How do I install the Real MACD Bounce Forex Trading Strategy?
- Download Real MACD Bounce Forex Trading Strategy.zip
- * Copy mq4 and ex4 files into your Metatrader directory / Experts / indicators /
- Copy the tpl file (template) into your Metatrader directory / templates /
- Start or restart your Metatrader client
- Choose the chart and time frame in which you want to test your forex strategy
- Right-click on your trading chart and move the mouse pointer over "Template".
- Move right to select Real MACD Bounce Forex Trading Strategy
- You will see that the Real MACD Bounce Forex trading strategy is available on your chart
* Note: Not all forex strategies come with mq4 / ex4 files. Some templates are already integrated in the MT4 indicators of the MetaTrader platform.
Click here to download:
Get download access