Have you ever applied exponential moving average (EMA) crossovers to assess market trends? Technically, EMAs are effective in determining current market trends since it weighs more on recent price-action changes. This guide explains how the 3 MA Cross with Alert MTF can help you identify critical trend reversal signals in the MT4 platform.
What is the 3 MA Cross with Alert MTF?
The 3 MA Cross with Alert MTF is a multi-timeframe indicator that functions similarly to a standard moving average. The indicator displays three exponential moving averages with different parameters on the chart. The EMAs are classified as fast, medium, and slow.
When the two moving averages cross, the indicator generates a BUY or SELL signal. When the crossovers occur, the indicator displays arrows as well as diamonds. During bullish crossovers, the indicator displays a blue arrow and a diamond. In the event of bearish crossovers, the indicator displays a red arrow and a diamond.
3 MA Cross with Alert MTF Trading Strategy
The 3 MA Cross with Alert MTF plots two types of crossover signals. The short-term crossover signal appears when the 10 and 20 EMA intersect each other. On the other hand, the 20 and 40 EMA crossing each other indicates a long-term crossover signal.
When an EMA moves above a longer period, EMA considers it as a bullish trend signal. Contrarily, a faster EMA moving below the slower EMA signals a bearish market trend.
Besides crossovers, the exponential moving average levels can also work as dynamic support/resistance levels.
Here are the rules for buy entries:
- 10 EMA moves above the 20 EMA.
- 20 EMA moves above the 40 EMA.
- A blue arrow and diamond signal appear below the price candle.
- Stop loss below the current 40 EMA level.
- Exit buy when the price breaks below the 40 EMA.
Here are the rules for sell entries:
- 10 EMA moves below the 20 EMA.
- 20 EMA moves belo the 40 EMA.
- A red arrow and diamond signal appear above the price candle.
- Stop loss above the current 40 EMA level.
- Exit sell when the price exceeds the 40 EMA.
3 MA Cross with Alert MTF Pros & Cons
Let’s have a quick look at the advantages and limitations of the 3 MA Cross with Alert MTF:
- Exponential moving averages react to price action changes faster than simple moving averages.
- Delivers easy-to-spot crossover signals.
- Includes arrow and diamond signals for a better understanding of the crossovers.
- Signals both short and long-term trends separately.
- Outlines dynamic support/resistance levels.
- Shows MTF alerts.
- The 3 MA cross signals may not work in flat trend conditions.
The 3 MA Cross with Alert MTF can be a great technical companion for traders who rely on EMA while assessing market trend conditions. It shows instant alerts on potential MA crossovers. Besides, you can customize its signal system in its MT4 settings to specify whether you’re looking for short or long-term trend signals. This indicator also sends trend signals using email alerts.
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