Moving average crossover strategies are probably one of the easiest types of strategies for new traders. It enables traders to trade with very little analysis of price action, support and resistance, and the trends. This is because crossover strategies are rule based. All you have to do is answer a few questions. "Have the moving averages crossed?" If so, then move on to the next question. "Which direction?" After you have answered these few questions, you can act accordingly.
Despite its popularity and simplicity, some traders still seem to have a hard time capturing the big trending moves that crossover strategies should capture. The trick is to take trades with a higher likelihood of trending rather than taking every signal that appears. It does this by filtering with some technical analysis tools that show the direction of the trend.
Fisher Moving Average's cross forex trading strategy is a crossover strategy that uses custom indicators to show the direction of the trend.
MA ribbon displays
The Moving Average Ribbon Indicator or MA Ribbon Indicator is a simple custom indicator that displays two modified moving averages with the area between the two filled moving averages. The area between the two moving averages changes color when the two moving averages intersect. Whenever the short term moving average is above the long term moving average, the area is filled with lime. If it is the other way around, the area will be filled in red. This conveniently shows traders the direction of the trend based on the location of the short term trend relative to the long term trend.
There are several ways to use this indicator.
First, it could be a trend direction filter. Based on the characteristics of this indicator, traders could use it to determine the direction of the trade. Traders can then opt for trades that match the direction of the trend.
Next, it could be used as an entrance area using the concept of dynamic supports and resistances. Based on the points mentioned above, we have already been able to determine the direction of the trend. However, we were also able to determine whether the price has already dropped so far that the entry point is considered a discount, taking into account the general direction of trade. If the price has moved back to the shaded area, we could already assume that it has decreased sufficiently by assuming that the trend would continue.
Finally, this indicator is also an independent crossover strategy indicator. Any time the two moving averages intersect and the area between them changes color, this is an input to a crossover strategy.
The Fisher indicator
The Fisher indicator is a custom oscillating indicator based on probabilities. It is an unlimited oscillating indicator that is represented by histogram bars. Positive figures are painted as lime histogram bars, while negative figures are painted as red histogram bars. The trend is then interpreted based on the color of the bars, with the lime bars being bullish and the red bars being bearish.
The characteristic of the Fisher indicator is a gently moving oscillating indicator that effectively shows the direction of the trend. It is more accurate than many other oscillating indicators available and works well as a trend filter indicator. Trades made in accordance with the Fisher Indicator appear to have a higher probability of success compared to other indicators.
Trading strategy concept
This strategy is a crossover strategy based on the MA Ribbons custom indicator. Entries are generated based on the crossing of the two moving averages and the change in the color of the area between the two moving averages.
However, not all entries are high probability trades, as is the case with most crossover strategies. To fix this, we're going to filter our trades based on the general trend direction. This is based on the Fisher indicator. Since the Fisher indicator is an excellent indicator for determining trend direction, it works well as a trend direction filter.
Only input signals generated by the MA Ribbons indicator that match the Fisher Indicator are considered a trading configuration.
- MA tape filled. 89.21
Time window: 1-hour, 4-hour, and daily charts only
Currency pairs: Major and minor pairs
Trading session: Meetings in Tokyo, London and New York
Buy (Long) Trade Setup
- The Fisher indicator should have printed positive lime histograms that indicate an established bullish trend direction
- Enter a buy trade once the MA Ribbon indicator flips over and the short term moving average is above the long term moving average
- Set the stop loss below the moving averages
- Once the Fisher indicator turns red, close the trade, indicating the possible beginning of a bearish trend
Sell (Short) Trade Setup
- The Fisher indicator should have negative red histograms printed indicating an established bearish trend direction
- Enter a sell trade once the MA Ribbon indicator goes over and the short term moving average is below the long term moving average
- Set the stop loss above the moving averages
- Close the trade as soon as the Fisher indicator changes to lime, indicating the possible beginning of an uptrend
This crossover strategy gives better results than most crossover strategies. The MA band alone is a good indicator of the crossover strategy. However, when combined with the Fisher indicator, which filters out trades that are inconsistent with its trend, the chances of a profitable trade that can lead to huge profits become exponential.
Forex Trading Strategy Installation Instructions
Fisher's moving average 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 history data and trading signals.
Fisher Moving Average's cross forex trading strategy provides the ability to spot various specifics and patterns in price dynamics that are invisible to the naked eye.
Based on this information, traders can assume further price movements and adjust this strategy accordingly.
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How do I install Fisher's sliding cross forex trading strategy?
- Download Fisher Moving Average Cross Forex Trading Strategy.zip
- * Copy mq4 and ex4 files to your Metatrader directory / Experts / Indicators /
- Copy the tpl file (template) into your Metatrader directory / templates /
- Start or restart your Metatrader client
- Select the chart and timeframe in which you want to test your forex strategy
- Right click on your trade chart and hover over "Template".
- Move right to select Fisher's moving average cross forex trading strategy
- You will see that Fisher's moving average cross forex trading strategy is available on your chart
* Note: Not all forex strategies come with mq4 / ex4 files. Some templates are already built into the MT4 indicators of the MetaTrader platform.
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