Ultimate Moving Average Indicator

The Ultimate moving average indicator is a good buy and sell signals indicator that works with every currency pair and period. The indicator is made up of three moving averages: rapid, intermediate, and slow. All price data is combined into one simple moving average line with basic trading rules. Traders can also change the type of moving average used: simple moving average, exponential moving average, smoothed moving average, and linear weighted moving average. Hence, feel free to play about with all of the indicator settings. This could be a good indicator for all types of trading, including scalping and day trading.

What is the Ultimate Moving Average Indicator?

The Ultimate MA forex indicator is a technical indicator used by forex traders to produce trading signals. The Ultimate Moving Average is based on a moving average of a currency pair’s price. The moving average is an essential technical instrument that is used by traders to identify trends. This technical indicator is made up of a weighted average of three different moving averages: simple, exponential, and weighted. Several forex traders utilize the Ultimate Moving Average technical indicator as part of their trading strategy.

Setting up the Ultimate Moving Average Indicator
Setting up the Ultimate Moving Average Indicator

Ultimate Moving Average Strategy

The Ultimate MA technical indicator can be used in conjunction with other technical indicators or as a stand-alone forex trading strategy. The Ultimate MA is represented as a line that oscillates in tandem with prices. The fundamental long and sell trading signals are simple to identify. You could buy or go long when prices open and close above the Moving Average line (this usually indicates a run for bullish momentum). On the other hand, you could sell or go short when prices open and close below the Moving Average line (this usually indicates a run for bearish momentum). The indicator assists the trader when a price trend reversal occurs, allowing the user to surf the market. The Ultimate MA might be implemented in a variety of periods due to its high flexibility.

Buy Signal

This could be your checklist for a buy trade:

  • When price is trading above the Ultimate MA.

Once this event occurs:

  • You could open a buy position after you confirm your entry with bullish candlestick patterns.
  • You could set your stop loss just below the nearest swing low.
  • You could set your take profit at the nearest resistance zone, or you could exit trade when price falls below the Ultimate MA.
  • For good risk management, I would only consider trades with a risk to reward ratio of at least 1:2.
Ultimate Moving Average Indicator Buy Setup
Ultimate Moving Average Indicator Buy Setup

Sell Signal

This could be your checklist for a sell trade:

  • When price is trading below the Ultimate MA.

Once this event occurs:

  • You could open a sell position after you confirm your entry with bearish candlestick patterns.
  • You could set your stop loss just above the nearest swing high.
  • You could set your take profit at the nearest support zone, or you could exit trade when price rises above the Ultimate MA.
  • For good risk management, I would only consider trades with a risk to reward ratio of at least 1:2.
Ultimate Moving Average Indicator Sell Setup
Ultimate Moving Average Indicator Sell Setup

Ultimate Moving Average Pros & Cons

Pros

  • The Ultimate Moving Average can be used by traders to identify the prevailing trend direction of an asset.
  • This indicator can also be used to provide dynamic support and resistance levels.

Cons

  • When the price action is choppy or moving mostly laterally, this indicator may provide little information.
  • The Ultimate Moving Average is capable of producing lagging signals which would negatively affect the trader’s risk to reward ratio.

Conclusion

The Ultimate Moving Average (Ultimate MA) is a forex trading technical indicator. This indicator assists traders to spot the trend and probable reversals in price movements. It accomplishes this by averaging prices across time, providing traders with a picture of the market trend. To effectively use this indicator, you may have to first grasp how it works and when each signal should be traded. However, note that this indicator may generate false signals sometimes.

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