Big Trend MACD Forex Trading Strategy

<p>“What comes up would surely come down.” Trends do not last forever. Some may last longer than others, but all trends would reach a point wherein it has to reverse.</p>
<p>Market trends are fairly common in the forex market. Although it does not happen every day on every currency pair, but out of all the currencies and forex pairs, there would usually be a pair that would trend in a certain timeframe.</p>
<p>As a trader, whenever you see a trending market, you know there is an opportunity to make money out of that market. Now, there are three things that a trending market could do. First, the market could continue its current trend. Second, the market trend could slow down or contract. Lastly, the market could reverse. Of all the three, trend reversals usually produce the highest yields whenever they occur. This is because a trend reversal is practically a start of a new trend.</p>
<p>The Big Trend MACD Forex Trading Strategy is a strategy which aims to capture large trending movements coming from reversals. This strategy provides entry strategies right at the start of a new trend coming from a previous trend that has abruptly reversed or has slowed down and eventually reversed.</p>
<h2><strong>Big Trend – Slope Direction Line</strong></h2>
<p>The Big Trend indicator is a trend following technical indicator based on the Slope Direction Line.</p>
<p>It is basically a modified moving average with a line that changes color based on the direction of the slope. It could either be a Simple Moving Average (SMA), an Exponential Moving Average (EMA), a Smoothed Moving Average (SMMA), or a Linear Weighted Moving Average (LWMA).</p>
<p>This indicator is an excellent tool to identify the direction of the trend based on a certain moving average parameter. Trend direction could be based on the slope of the moving average, which is clearly indicated by the color of the line.</p>
<h2><strong>BB MACD</strong></h2>
<p>The BB MACD is a custom indicator which is a combination of the traditional Moving Average Convergence and Divergence (MACD) and the Bollinger Bands (BB). Both indicators are displayed on the same window and could be used in conjunction with the other.</p>
<p>The MACD is displayed as a traditional MACD would be displayed, without the Signal Line. It displays histograms to represent the difference between the MACD Line and the Signal Line, as well as the MACD Line itself.</p>
<p>The indicator also displays the outer bands of the Bollinger Band and is displayed symmetrically. On its own, it cannot be used to identify trend direction, but could only provide information regarding volatility. This allows traders to identify whether the market is on a contraction phase or an expansion phase.</p>
<p>Although the outer lines of the Bollinger Band could not be used to determine trend direction on its own, it could still be used to identify momentum, oversold and overbought market conditions, and mean reversals coming from overextended price conditions when used in conjunction with the MACD Line.</p>
<p>Momentum could be identified whenever the MACD Line stays beyond the outer lines of the Bollinger Band. Overbought and oversold conditions could also be identified based on whether the MACD line is beyond the outer lines of the Bollinger Band. Mean Reversals on the other hand are conditions wherein the MACD line is hooking back towards the midline coming from an overbought or oversold condition.</p>
<h2><strong>Trading Strategy</strong></h2>
<p>This strategy is a trend reversal strategy which provides trend reversal entry signals preceded by an overbought or oversold market condition.</p>
<p>To trade this strategy, we will be using the BB MACD indicator to identify oversold or overbought markets that are starting to reverse. This will be based on whether the MACD Line is hooking back towards the midline coming from an oversold or overbought territory. This should then be accompanied by a trend reversal signal based on the MACD histograms.</p>
<p>On the Big Trend indicator, the said trend reversal should also be confirmed based on its slope. This will be clearly indicated by the changing of the Slope Direction Line color.</p>
<p><strong><em>Indicators:</em></strong></p>
<ul>
<li><em>bbmacd (default setting)</em></li>
<li><em>Big Trend</em>
<ul>
<li><em>Period: 60</em></li>
</ul>
</li>
</ul>
<p><em><strong>Preferred Time Frames:</strong> 15-minute, 30-minute, 1-hour and 4-hour charts</em></p>
<p><em><strong>Currency Pairs:</strong> major and minor pairs</em></p>
<p><em><strong>Trading Session:</strong> Tokyo, London and New York</em></p>
<h3><strong>Buy Trade Setup</strong></h3>
<p><strong><em>Entry</em></strong></p>
<ul>
<li>The MACD Line should be hooking up coming from an oversold condition based on the Bollinger Band’s lower line.</li>
<li>The BB MACD indicator’s MACD histograms should print a positive blue histogram indicating a bullish trend reversal.</li>
<li>The Slope Direction Line should change to light blue indicating a bullish trend reversal.</li>
<li>These bullish trend signals should be somewhat aligned.</li>
<li>Enter a buy order on the confluence of the conditions above.</li>
</ul>
<p><strong><em>Stop Loss</em></strong></p>
<ul>
<li>Set the stop loss on the fractal below the entry candle.</li>
</ul>
<p><strong><em>Exit</em></strong></p>
<ul>
<li>Close the trade as soon as the Slope Direction Line changes to color tomato.</li>
<li>Close the trade as soon as the BB MACD bars become negative.</li>
</ul>
<p><img class="alignnone size-full wp-image-65792" src="https://www.forexmt4indicators.com/wp-content/uploads/2021/01/Big-Trend-MACD-Forex-Trading-Strategy-1.png" alt="Big Trend MACD Forex Trading Strategy 1" width="977" height="625" srcset="https://www.forexmt4indicators.com/wp-content/uploads/2021/01/Big-Trend-MACD-Forex-Trading-Strategy-1.png 977w, https://www.forexmt4indicators.com/wp-content/uploads/2021/01/Big-Trend-MACD-Forex-Trading-Strategy-1-300×192.png 300w, https://www.forexmt4indicators.com/wp-content/uploads/2021/01/Big-Trend-MACD-Forex-Trading-Strategy-1-768×491.png 768w" sizes="(max-width: 977px) 100vw, 977px" /></p>
<p><img class="alignnone size-full wp-image-65791" src="https://www.forexmt4indicators.com/wp-content/uploads/2021/01/Big-Trend-MACD-Forex-Trading-Strategy-2.png" alt="Big Trend MACD Forex Trading Strategy 2" width="977" height="625" srcset="https://www.forexmt4indicators.com/wp-content/uploads/2021/01/Big-Trend-MACD-Forex-Trading-Strategy-2.png 977w, https://www.forexmt4indicators.com/wp-content/uploads/2021/01/Big-Trend-MACD-Forex-Trading-Strategy-2-300×192.png 300w, https://www.forexmt4indicators.com/wp-content/uploads/2021/01/Big-Trend-MACD-Forex-Trading-Strategy-2-768×491.png 768w" sizes="(max-width: 977px) 100vw, 977px" /></p>
<h3><strong>Sell Trade Setup</strong></h3>
<p><strong><em>Entry</em></strong></p>
<ul>
<li>The MACD Line should be hooking down coming from an overbought condition based on the Bollinger Band’s upper line.</li>
<li>The BB MACD indicator’s MACD histograms should print a negative white histogram indicating a bearish trend reversal.</li>
<li>The Slope Direction Line should change to color tomato indicating a bearish trend reversal.</li>
<li>These bearish trend signals should be somewhat aligned.</li>
<li>Enter a sell order on the confluence of the conditions above.</li>
</ul>
<p><strong><em>Stop Loss</em></strong></p>
<ul>
<li>Set the stop loss on the fractal above the entry candle.</li>
</ul>
<p><strong><em>Exit</em></strong></p>
<ul>
<li>Close the trade as soon as the Slope Direction Line changes to color light blue.</li>
<li>Close the trade as soon as the BB MACD bars become positive.</li>
</ul>
<p><img class="alignnone size-full wp-image-65790" src="https://www.forexmt4indicators.com/wp-content/uploads/2021/01/Big-Trend-MACD-Forex-Trading-Strategy-3.png" alt="Big Trend MACD Forex Trading Strategy 3" width="977" height="625" srcset="https://www.forexmt4indicators.com/wp-content/uploads/2021/01/Big-Trend-MACD-Forex-Trading-Strategy-3.png 977w, https://www.forexmt4indicators.com/wp-content/uploads/2021/01/Big-Trend-MACD-Forex-Trading-Strategy-3-300×192.png 300w, https://www.forexmt4indicators.com/wp-content/uploads/2021/01/Big-Trend-MACD-Forex-Trading-Strategy-3-768×491.png 768w" sizes="(max-width: 977px) 100vw, 977px" /></p>
<p><img class="alignnone size-full wp-image-65789" src="https://www.forexmt4indicators.com/wp-content/uploads/2021/01/Big-Trend-MACD-Forex-Trading-Strategy-4.png" alt="Big Trend MACD Forex Trading Strategy 4" width="977" height="625" srcset="https://www.forexmt4indicators.com/wp-content/uploads/2021/01/Big-Trend-MACD-Forex-Trading-Strategy-4.png 977w, https://www.forexmt4indicators.com/wp-content/uploads/2021/01/Big-Trend-MACD-Forex-Trading-Strategy-4-300×192.png 300w, https://www.forexmt4indicators.com/wp-content/uploads/2021/01/Big-Trend-MACD-Forex-Trading-Strategy-4-768×491.png 768w" sizes="(max-width: 977px) 100vw, 977px" /></p>
<h2><strong>Conclusion</strong></h2>
<p>This strategy works well as a trend reversal strategy coming from an overextended trend.</p>
<p>Often, the entries would result in a short trend reversal followed by a contraction phase, or an actual trend reversal that would result in huge moves on the opposite direction. Either way, traders could be profitable on these setups. However, it is the big trend reversals that produce huge gains.</p>
<p>It is also best to move the stop loss to breakeven after the first momentum move going towards the direction of the new trend. This ensures that the trade is protected from a loss if ever price reverses instantly.</p>
<p><h3><span><strong><br />
Forex Trading Strategies Installation Instructions</strong></span></h3>
<p>Big Trend MACD Forex Trading Strategy is a combination of Metatrader 4 (MT4) indicator(s) and template.</p>
<p>The essence of this forex strategy is to transform the accumulated history data and trading signals.</p>
<p>Big Trend MACD Forex Trading Strategy provides an opportunity to detect various peculiarities and patterns in price dynamics which are invisible to the naked eye.</p>
<p>Based on this information, traders can assume further price movement and adjust this strategy accordingly.</p>
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<h3><strong>How to install Big Trend MACD Forex Trading Strategy?</strong></h3>
<ul>
<li>Download Big Trend MACD Forex Trading Strategy.zip</li>
<li>*Copy mq4 and ex4 files to your Metatrader Directory / experts / indicators /</li>
<li>Copy tpl file (Template) to your Metatrader Directory / templates /</li>
<li>Start or restart your Metatrader Client</li>
<li>Select Chart and Timeframe where you want to test your forex strategy</li>
<li>Right click on your trading chart and hover on “Template”</li>
<li>Move right to select Big Trend MACD Forex Trading Strategy</li>
<li>You will see Big Trend MACD Forex Trading Strategy is available on your Chart</li>
</ul>
<p><span><em>*Note: Not all forex strategies come with mq4/ex4 files. Some templates are already integrated with the MT4 Indicators from the MetaTrader Platform.</em></span></p>
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