Modified Moving Average indicator (for Scalping purposes) Modified Moving Average indicator (for Scalping purposes)

The Modified Moving Average indicator is a simple yet intuitive yet informative Forex indicator based on the standard moving average. It plots modified Forex moving averages directly in another window of the trading chart. This indicator is available for the MT4 version of the MetaTrader platform.

In the ordinary moving average, it adds the last p prices and then divides the sum by p (the number of samples). If, instead, we divide the sum by the value of the last price (for example, the closing price of the last candle), then we get an oscillatory MA:

 OSC_MA(i) = c0 - [x(i+ p ) + x(i+ p -1) + ... + x(i+1) + x(i)] / x(i) , i = 0 : bar；

where c0 is a constant that moves the result toward zero (c0 is set to p ).

Examples and Strategies

• For best accuracy and utilization, it is recommended to use this indicator on the 1-minute timeframe and for scalping or day trading.
• This indicator is best used during divergence conditions. When the indicator shows divergence , then I find that the 1 minute trend (and sometimes the hourly trend) will soon reverse or the price remains at that level (i.e. it is crucial to wait for the divergence and trade in the direction of the hourly trend).
• When setting the default options (periods = 90 on the 1-minute timeframe), the area between 0.1 ~ 0.15 (sell area) and -0.1 ~ -0.15 (buy area) is worth paying attention to. The indicator rarely approaches 0.2 and -0.2 and above.
• Focusing on support and resistance areas as well as trend lines will help traders gain better entry and exit points.
• In a short-term trend, a pullback from the "0" level may be the beginning of a subsequent wave reaching higher highs or lower lows, and trading a pullback (from 0) in a trend appears to be a safer trade.

The Modified MA Forex Indicator System is not a standalone trading indicator, this indicator is very useful for your trading because of additional chart analysis, finding trade exit positions (TP/SL), etc. While the system can be used by traders of all experience levels, it may be helpful to practice trading on an MT4 demo account until you become consistent and confident enough to go online. You can open a live or demo trading account with most MT4 Forex brokers.

Modified Moving Average Indicator Download

Discussion

Warning! If you don't know how to install this Forex indicator, please read the MetaTrader Indicators Tutorial.

Do you have any more suggestions for this Forex indicator? You can always discuss Modified Forex Moving Averages with other traders and MQL programmers on the indicator forum.