Everything You Need To Know About Moving Average EA
Identifying trend direction is as important to a forex trader as the engine of a car. In fact, if you can identify trend direction or determine the support and resistance levels of trade, 60% of the work has been done. The remaining 40% is to bring in your trading strategies to make a profit. While there are different Expert Advisors or technical indicators on the market that can help you out with all of these without lifting a finger, the Moving Average EA is different from the rest.
This EA does more than helping forex traders to determine price and market direction. What other things can you use it for? How does it work, and what are its features? Are there special settings or configurations that forex traders need to be aware of?
We have provided you with the answers and many more; just read on.
What Is The Moving Average EA?
The Moving Average EA doesn’t need much introduction. It is very popular among serious-minded traders. We mean traders that would not leave any stone unturned without smiling to the bank. At its core, this EA is designed to help traders determine price direction by smoothing out noise from price fluctuations.
Whether you are a day trader, scalper, long-term, or swing traders, this EA can help you automate your trades so that you concentrate on other important endeavors. It is compatible with the popular MT4 trading system.
Plus, it works very well with a range of technical indicators. This EA should not be used in isolation. Before you open a trade with this EA, ensure you have at least two technical indicators already installed on your trading terminal. That way, you are sure of not losing your trading capital.
Features of The Moving Average
Find below some features of this EA:
1. It is easy and straightforward to use. A newbie that just started trading the forex market without much experience can use this EA to improve his/her trading strategies. Additionally, this EA is highly customizable.
2. This expert advisor enables grid trading. If you are a trader that fancies grid trading, you will enjoy using the Moving Average.
3. It works for both ECN and non-ECN brokers.
4. Customizable break-even, trailing stop, TP, and SL.
5. This EA has built-in money management features. This feature is good for beginners.
6. You can configure this expert advisor to suit your trading preferences.
Trade Logic Of This Forex Robot (How It Works)
This EA uses only one moving average to trade. In fact, the Moving Average will enter a long position as soon as a candle crosses the Moving Average from below. Conversely, if the candle crosses the Moving Average from above, this EA will enter a short position.
This expert advisor will open a buy position if you enter a Padding in Pips. Similarly, if the price is X pips above the MA line, the EA will also open a buying position.
Moving Average Trend Filter
This forex robot comes with the normal moving average trend filter function, which is present in all the versions. It also has 3 additional settings for easy configurations to suit your trade requirements. You will start to get better entry signals once you activate this filter.
Advanced MA Trend Filter Settings
Below are the trend filter settings:
1. Price: You should place a trade order only when the price is above or below the trend filter
2. Signal MA: You should place a trade order only when the signal MA is above or below the trend filter
3. Slope: You should place a trade order only when the direction of the trend filter slope is upward or downward.
Parameters for the Moving Average
1. Applied Price: This is the price value which the Moving Average calculations would be based on.
2. Averaging method: This is the method of the price series.
3. Shift: The Moving Average shift relative to the chart. The default value is 0.
4. Averaging period: The default value of the averaging period is 80.
5. Timeframe: This is the time which the robot should work irrespective of your chart’s timeframe.
Additional MA Trend Filter
The Moving Average EA comes with additional parameters for the trend filter. Some of the parameters are:
1. Use Price: If the close price is above trend filter, the expert advisor will only open a long trade. Same is true for short trades.
2. Use Signal MA: If the Moving Average signal is above the trend filter, the EA will only open a long trade. Same is also true for short trades.
3. Use Slope: If the trend filter is sloping upwards, the EA will only open long trades. Same is true for short trades.
Final Thoughts On Moving Average EA
The Moving Average EA is a widely used expert advisor that smooths out price trends. It does this by filtering out noise from price fluctuations. This EA also helps traders to identify trend direction. What’s more? It also helps traders to determine resistance and support levels.
Combining this EA with technical indicators would help you to make the most out of the FX market. Indicators like the Gap Indicator, MACD indicator, as well as Support and Resistance indicators, work well with the Moving Average. Aside from improving your trading strategies, this combo can help you to reach your profits potential on time. The important thing is that we have all these technical indicators listed here on our site. Feel free to check them out!
Lastly, no way you should attempt to use the Moving Average with a live account first up. At best, use it with a demo account first to understand how it works. But if you already know how it works, feel free to trade with it using a live account to make better trading decisions.
And of course, don’t forget to share your trading experience with us after using the Moving Average indicator for the first time.