MACD Trend Trading: The Weighted MA System
The “MACD Trend Trading” strategy is a specialized system for GBPUSD, AUDUSD, and EURUSD that uses Linear Weighted Moving Averages (LWMA) to smooth out price action. It relies on the crossover of a fast 5-period MA against a band of slower MAs (75 and 85), confirmed by the MACD histogram.
Strategy Profile
Timeframes
M30, H1
Pairs
GBP, AUD, EUR
Indicators
3 LWMAs + MACD
1. Indicator Setup
Configure your chart with these specific Linear Weighted Moving Averages (applied to Low):
- Slow MA 1: Period 85, Linear Weighted, Apply to Low, Color Red.
- Slow MA 2: Period 75, Linear Weighted, Apply to Low, Color Red.
- Fast MA: Period 5, Linear Weighted, Apply to Low, Color Yellow.
- MACD: Settings 15, 26, 1.
2. Trading Rules
Short Entry (Sell)
- Crossover: The Yellow MA (5) crosses both Red MAs (75 & 85) from top to bottom.
- Confirmation: The MACD histogram is located below the zero line.
Long Entry (Buy)
- Crossover: The Yellow MA (5) crosses both Red MAs (75 & 85) from bottom to top.
- Confirmation: The MACD histogram is located above the zero line.
Trade Management
- Stop Loss: Tight stop of no more than 10 points.
- Take Profit (EURUSD): 15 pts (M30) / 20 pts (H1).
- Take Profit (GBPUSD): 20 pts (M30) / 28 pts (H1).
- Take Profit (AUDUSD): 10 pts (M30) / 15 pts (H1).
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