Introduction to the 3 Moving Average Cross with Alert Indicator
One of the ways traders objectively identify a trend reversal is with the use of moving average crossovers. Traders would identify a bullish trend reversal whenever a fast moving average line crosses above a slow moving average line. Inversely, they also identify bearish trend reversals whenever the moving average lines crossover moving down. This indicator simplifies this process by plotting an arrow whenever its underlying moving averages crossover.
What is the 3 Moving Average Cross with Alert Indicator?
The 3 Moving Average Cross with Alert Indicator is a trend following indicator which also acts as a trend reversal signal indicator. It identifies trend reversals using moving average lines as a basis for identifying trends and plots an arrow pointing the direction of the trend reversal. It plots red arrows pointing up to indicate a bullish trend reversal, and green arrows pointing down to indicate a bearish trend reversal.
How the 3 Moving Average Cross with Alert Indicator Works?
The 3 Moving Average Cross with Alert Indicator uses the crossing over of three underlying moving average lines as a basis for identifying trend reversals.
It detects whenever the faster moving average lines has crossed above the slower moving average lines wherein the fastest moving average line is at the top and slowest moving average line is at the bottom. It then plots an arrow pointing up whenever this sequence is detected.
Inversely, it also detects whenever the moving average lines crossover wherein the fastest moving average line is as the bottom and the slowest is at the top. It then plots an arrow pointing down as this develops.
How to use the 3 Moving Average Cross with Alert Indicator for MT4
This indicator has several variables which adjusts the underlying moving average lines thereby modifying the sensitivity of the indicator.
“FasterMA”, “MediumMA”, and “SlowerMA” refers to the number of bars used by the moving average lines.
“FasterShift”, “MediumShift”, and “SlowerShift” shifts the underlying moving average lines forward or back.
“FasterMode”, “MediumMode”, and SlowerMode” allows users to choose which type of underlying moving average is used.
“Sound Alert” toggles the alert on or off as the moving average lines crossover.
This indicator can be used as a trend reversal signal indicator using the arrows as a basis for the reversal signals. However, this indicator is best used in confluence with other technical analysis indications. Since moving average crossovers do tend to have lag, traders can also set a take profit target in order to exit their trades earlier with higher profits.
Buy Trade Setup
When to Enter?
Open a buy order as soon as an arrow pointing up is formed. Set the stop loss on the support below the entry candle.
When to Exit?
Set a take profit target on a logical resistance level or close the trade as an arrow pointing down forms.
Sell Trade Setup
When to Enter?
Open a sell order as soon as an arrow pointing down is formed. Set the stop loss on the resistance above the entry candle.
When to Exit?
Set a take profit target on a logical support level or close the trade as an arrow pointing up forms.
Conclusion
Moving average crossovers can be a good option for identifying trend reversals and used as an entry signal. This indicator is an excellent tool for this purpose. However, it is up to the user to modify the underlying moving average lines in order to arrive at the right combination of moving averages.
Recommended MT4/MT5 Brokers
XM Broker
- Free $50 To Start Trading Instantly! (Withdraw-able Profit)
- Deposit Bonus up to $5,000
- Unlimited Loyalty Program
- Award Winning Forex Broker
- Additional Exclusive Bonuses Throughout The Year
>> Sign Up for XM Broker Account here <<
FBS Broker
- Trade 100 Bonus: Free $100 to kickstart your trading journey!
- 100% Deposit Bonus: Double your deposit up to $10,000 and trade with enhanced capital.
- Leverage up to 1:3000: Maximizing potential profits with one of the highest leverage options available.
- ‘Best Customer Service Broker Asia’ Award: Recognized excellence in customer support and service.
- Seasonal Promotions: Enjoy a variety of exclusive bonuses and promotional offers all year round.
>> Sign Up for FBS Broker Account here <<
(Free MT4 Indicators Download)
Click here below to download: