The moving average line is a valuable technical indicator that is also very easy to use. There are many aspects of the moving average that could give important information regarding the asset or Forex pair you are analyzing.
One such aspect is knowing where the "vertex" is and where "the valley" is on the moving average line. The default indicators that come with most trading platforms don't include such a feature that will show this insightful information.
Here in this article, we are introducing an improvement of the basic moving average indicator. This MT4 indicator will show you the exact points on the chart when the slope of the moving average changes.
As you can see from the image, this indicator changes the color according to the slope of the moving average line. This should make it easier to grasp the end and beginning of the trend. However, it is not recommended to place an order just because the MA color has changed. A better solution would be to perhaps combine this indicator with other tools in order to use it more reliably in a trading strategy.
Tips for using:
1. Combine it with a long-term moving average
As an example, on the chart below, the indicator is combined with a 200-day moving average. In the image, a buy order is placed only when the conditions - ``moving average line color is blue"; and "this indicator is above the 200-day moving average line" - are met (vice versa for sell orders). As you can see from the image, you should know that if you trade with this rule, you are likely to have a very high win rate.
2. Determine the state of the market
If the color of this indicator changes frequently, the possibility of the currency pair being in a range market is high. In such cases, it is better to trade using an oscillator indicator rather than a trend-following method. In this way, this indicator can also be used for trend determination.
Download the "SlopeDirection" MA indicator from the button below
Do you need help with installing this indicator into MT4 for Windows or Mac OS? Our guide HERE will help you.
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