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The iMA Max Min indicator is a trading algorithm based on the use of moving averages. Thus, the indicator, using several moving averages, generates calculations, which in turn are aimed at determining the direction of the current trend in the market, which in turn allows considering opening trades in this period. The iMA Max Min indicator is displayed directly in the main window of the price chart in the form of three moving averages, which form a channel with two borders and an average line, the direction of which is directly related to the current trend, and the location of the candle relative to the lines determines the moment of opening positions.
The iMA Max Min indicator is suitable for trading on any timeframe using any currency pairs.
Input parameters
The iMA Max Min indicator settings consist of four input parameters, each of which is related to setting the moving averages of the indicator, namely, their technical work. The Colors section in the indicator settings is used to change the color scheme, thickness and visualization of its lines.
- MA:averaging period - value of the indicator period. The default value is 12.
- MA:horizontal shift - shift parameter for moving average values. The default value is 0.
- MA:smoothing type - the type of smoothing of the moving averages of the indicator. The default value is Simple.
- MA:type of price - type of price to which the indicator calculations are applied. By default, it is set to Close price.
Indicator signals
The use and application of the iMA Max Min indicator is based on a simple principle. And in its concept it resembles the use of a standard moving average. That is, to open a certain trade, it is necessary to take into account the direction of the lines and the location of the signal candle relative to them. If an uptrend is determined on the market, long positions are opened, if the trend is down - short positions. In both cases, trades are closed during the period of a change in the direction of the trend.
Signal for Buy trades:
- The indicator lines are moving up. The current candle should close above the middle line, while also crossing the upper border.
Upon receipt of such conditions on a signal bullish candle, a long position may be opened, due to the presence of an upward market movement. The trade should be closed when a reverse direction of the lines is received. At this moment, one should consider opening new trades, due to a change in the current trend.
Signal for Sell trades:
- The channel formed by the indicator lines moves from top to bottom. At the same time, the current candle should close below the middle line, reaching the bottom line.
A short position can be opened on a signal candle when such conditions are received during a downtrend in the market. If the current trend changes, namely at the moment of changing the direction of the lines, the position should be closed. This, in turn, will allow considering the opening of new trades.
Conclusion
iMA Max Min is a very effective trading algorithm, since it is based on an indicator whose accuracy has been proven by time. At the same time, its use algorithm is very simple, and this, in turn, allows traders with different levels of trading skills to use the indicator. To improve the quality of trading, it is recommended not only preliminary practice on a demo account, but also the use of an indicator with additional filters, tools and other indicators.
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