Two Pairs of Averages + MACD: A Trend Following System
The “Two Pairs of Averages + MACD” strategy is a comprehensive trend-following system designed for H4 and Daily timeframes. It utilizes four Exponential Moving Averages (EMAs) grouped into two pairs—a “Signal Pair” for entries and a “Trend Pair” for filtering direction—along with the MACD to confirm momentum.
Strategy Profile
Timeframes
H4, D1
Pairs
All Pairs
Indicators
4 EMAs + MACD
1. Indicator Setup
This strategy requires a specific configuration of Exponential Moving Averages to define both the trend and the entry signal:
- Signal Pair (Fast): EMA 5 and EMA 15. (Used for crossovers).
- Trend Pair (Slow): EMA 50 and EMA 100. (Used as a trend filter).
- Momentum: MACD (Settings: 12, 26, 9).
2. Long Entry (Buy) Rules
Execute a buy trade when the short-term momentum aligns with the long-term trend:
- Trend Filter: The price must be located ABOVE both the EMA 50 and EMA 100.
- Crossover: The EMA 5 crosses the EMA 15 from bottom to top.
- Confirmation: The MACD histogram is in the positive zone (above zero).
Note: Do not trade if the price is trapped between EMA 50 and EMA 100.
3. Short Entry (Sell) Rules
Execute a sell trade when the following conditions are met:
- Trend Filter: The price must be located BELOW both the EMA 50 and EMA 100.
- Crossover: The EMA 5 crosses the EMA 15 from top to bottom.
- Confirmation: The MACD histogram is in the negative zone (below zero).
Trade Management
Stop Loss
Place SL at the level of the EMA 50 line.
Take Profit
H4: 60 pts (EURUSD), 70 pts (GBPUSD).
D1: 200 pts (EURUSD), 250 pts (GBPUSD).
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