The Moving Average indicator smooths out market swings by using a unique price average. This tool compares the current price to its average value to determine trend conditions.
The moving average, like any other trend indicator, can help you predict the price’s future path and possible destination. This classic technical technique, however, differs from the market’s ordinary exponential and simple moving averages.
Because the SMA has a lagging issue, most day traders favor the EMA because it reacts much faster than the simple one. As a result, the creator of this indicator intended to design an advanced moving average that applies to MTF charts and accommodates all types of trading methods.
Features of The Indicator
Here are some of the features of the Moving Average indicator for MT4
- Traders can add numerous moving averages to their charts to have a better grasp of the trend and develop more complicated trading signals.
- Traders can create alerts to receive notifications when the price passes above or below a moving average. This can be handy for traders who wish to be notified of prospective trading opportunities without constantly monitoring their charts.
- Compatibility with other indicators: You can combine the Moving Average indicator with other technical indicators to produce more accurate and consistent trade signals.
Buy Sell Signal
The Moving Average indicator gives entry signals. The bullish entry signal occurs when the price exceeds the current moving average value. This is an indication of an up trend. Enter a long trade and place your stop loss below the previous swing low.
For the sell signal, the price turns lower than the current moving average value. This is an indication of a downtrend. Enter a short trade and place your stop loss above the previous swing high.
The Moving Average indicator is an excellent tool for showing trends in the market. Moreover, you can get trade entry signals, as illustrated above.