MACD 4 Hour Trading Strategy

Most forex strategies will work well when kept as simple as possible, which is the aim of this MACD 4 Hour Trading Strategy. Nothing confuses new traders more than having charts that are loaded with countless indicators. When you have indicators flying everywhere, it is difficult to interpret the signals generated and this will lead to mistakes in entry signals.

The forex trading strategy that is described below is a simple forex trading strategy that involves the use of the Moving Average Convergence Divergence (MACD) indicator only. The chart used for the execution of this strategy is the 4 hour chart, which is the midpoint chart between the hourly chart and the daily chart. This makes this strategy good for traders who have a medium term outlook on the currency asset in question.

Top UK Forex Brokers With MACD Indicator

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    FXCC's key selling point is its forex trading conditions. ECN spreads come in as low as 0.0 pips during peak trading hours, while it supports a wider range of currency pairs than the majority of rivals with over 70 forex assets. Additionally, you have access to MT4, which was built specifically for forex trading and excels for its charting tools.

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    Pepperstone offers ultra-competitive forex spreads averaging 0.12 pips on EUR/USD in the Razor account, accompanied by a diverse portfolio comprising 100+ currency pairs - an extensive selection surpassing most competitors. Additionally, Pepperstone distinguishes itself by offering three currency indices (USDX, EURX, JPYX), not commonly found among alternative platforms. Pepperstone has now won our annual 'Best Forex Broker' award twice.

  3. XM

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    XM offers ultra low spreads across a wide range of forex assets with no re-quotes or hidden charges. Over 50 currency pairs are available, which is above the market average and is in line with one of our top award-winners, AvaTrade.

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    OANDA offers 68 currency pairs, which is above the industry average. You can speculate on majors, minors and exotics, with spreads from 0.8 pips on popular pairs. There are no commissions and leverage is available up to 1:200. Average execution speeds are fast based on tests, at 12 milliseconds.

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    FxPro offers 70+ currency pairs with ultra-fast execution speeds and tight spreads from 0.46 pips on EUR/USD. The range of forex assets outranks many rivals, including our award winner, AvaTrade. Various short-term forex strategies are permitted, including EA trading and hedging.

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    IG offers an above-average suite of 80+ currency pairs on its proprietary web platform, mobile app or MetaTrader 4, with more advanced charts and forex analysis tools available on the ProRealTime software. Forex spreads are competitive based on tests, starting from 0.1 pips on majors like the EUR/USD.

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    Markets.com offers 43 major, minor and exotic currency pairs. The range is around the industry average, though spreads are fairly competitive, starting from 0.6 pips for EUR/USD. There’s also an excellent range of tools and education, including forex calculators and trading videos.

  8. Axi

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    Axi continues to offer a strong selection of 70+ currency pairs - more than many top brokers including award-winner AvaTrade, with only 50+. There are no restrictions on trading strategies including algo trading and scalping, which will serve both short-term and long-term traders.

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    Global Prime traders can access 48 forex pairs including majors, minors and exotics with tight spreads from 0.9 with no commission or from 0 with a $7 round turn. Forex is traded via the leading MT4 platform, micro lots are available and latency is low via a New York-based server.

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    Vantage offers 55+ currency pairs - above the industry average, so experienced traders can explore plenty of opportunities. Vantage's deep liquidity pool provides forex spreads from 0.0 pips in the ECN account, lower than many alternatives. There are also no commissions, deposit fees or hidden charges.

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    AvaTrade offers 50+ currency pairs with competitive spreads from 0.9 pips and zero commissions. You can trade majors, minors and exotics around the clock on industry-leading platforms, including MT4 and MT5. Traders can also access beginner-friendly trading tools and comprehensive forex education.

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    FOREX.com continues to uphold its stature as a premier FX broker, offering over 80 currency pairs and boasting some of the most competitive fees in the industry. With EUR/USD spreads dipping as low as 0.0 and $5 commission per $100k, it stands out. Moreover, its SMART Signals help to identify price behaviors across numerous major currency markets.

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    DNA Markets continues to deliver an excellent environment for forex traders with 40+ currency pairs and low spreads from 0.0 pips on the EUR/USD during tests. The MetaTrader 4 platform, available on desktop, web and mobile, was also designed specifically for forex trading.

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    OspreyFX offers more than 50 major, minor and exotic currency pairs. Spreads start from just 0.1 pips on the EUR/USD and the broker provides a suite of forex trading education for beginners, including partnering with Forex Squad.

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    Errante traders can access 50+ forex pairs with leverage up to 1:500 (location dependant). The broker offers fast execution and tight spreads, especially to clients with VIP and Tailor-Made accounts.

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    Kwakol Markets offers a wider range of forex pairs than most competitors, with 90+ assets available. Users get fast execution speeds and competitive spreads through the ECN model. On the negative side, not all currency pairs are available on MT4.

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    Trade 70 major, minor and exotic forex pairs with ultra-low ECN spreads and fast execution via the MT4 or MT5 platforms. There are also zero SL/TP limits and automated forex trading is well catered for.

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    Ingot Brokers offers forex trading on a modest suite of 30+ currency pairs with raw spreads on the MT5 platform. There are also no restrictions on short-term trading strategies, including hedging, scalping and the use of Expert Advisors (EAs).

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    Trade a small selection of 25 major and minor pairs. Spreads from zero on the pro account, micro-lot trading, and very high leverage make up for the limited range of currencies. The MetaTrader software is also a well-regarded platform for forex trading.

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    Go long or short on over 50 currency pairs with spreads from 0.6 pips on EUR/USD. Traders can access market-leading forex tools in the MT4 platform, including customisable forex charts and algorithmic trading.

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    World Forex offers CFD and digital contract trading on 53 forex pairs, including EUR/USD and GBP/EUR. High leverage is available for CFDs, which can be accessed with competitive spreads on certain account types.

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    Trade 45+ major, minor and exotic pairs with deep liquidity and low latency. The ultra-tight spreads from 0.01 pips on raw accounts, competitive $7 or lower round-turn commissions and high leverage up to 1:500 will suit scalpers, who can trade without limits.

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    Scope Markets offers 40+ major, minor and exotic currency pairs. Although the range is average, experienced traders can access very high leverage up to 1:2000. Additionally, the broker’s proprietary terminal delivers advanced analysis tools, including a live forex heatmap.

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    Trade 50+ forex pairs, including popular major, minor and exotic pairs. This is a decent selection, but traders will have a choice between the attractive MT4, MT5 or IRESS platforms and regulatory cover from ASIC. The VPS will also suit automated forex trading strategis.

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    Anzo Capital offers 45+ forex pairs including majors, minors and exotics with fast execution and spreads starting from zero. High leverage up to 1:1000 is available with a margin call at 80% and a stop out level at 50%.

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    Rock Global clients can access 50+ currency pairs via CFDs with leverage up to 1:500, world class liquidity and fast execution on the MT4 or TWS platforms. The tight spreads from 0.9 with no commission are a particularly attractive feature.

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    VT Markets offers an average selection of 40+ forex pairs with up to 1:500 leverage. Forex spreads in the ECN account are highly competitive, starting from 0.0 pips, although the 1.2-pip minimum quotes in the Standard account are a little higher than the likes of Pepperstone or IC Markets.

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    Binary and OTC options can be purchased on 40+ currency pairs, with 55+ currency pairs available if you deposit $1000. Typical payouts are reasonable at 81% and the $1 minimum trade makes the broker accessible to new forex traders. There is also access to the MT4 and MT5 platforms for experienced forex traders.

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    Exinity offers 150+ forex pairs to trade on a very competitive ECN pricing model, with spreads from zero and low commissions of $4 per round turn. Traders can access the powerful MT4 and MT5 platforms and trade with no restrictions on popular trading strategies.

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    ForexChief supports spot foreign exchange trading on all account types for 40+ major, minor and exotic currency pairs. Trading takes place on the leading MT4 and MT5 platforms, which offer dozens of in-built technical tools for short-term forex strategies.

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    PU Prime clients can trade 40+ forex pairs via the MT4 and MT5 platforms with dynamic leverage up to 1:500. Spreads start from near zero on Prime accounts, which also charge a $7 commission per lot, and a zero-commission Standard account with wider spreads is also available.

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    With 100+ currency pairs including all majors plus many minors and exotics tradeable on the MT4 platform with 1:2000 leverage, SuperForex lives up to its name as a great choice for forex traders. The ForexCopy system is also useful for newer traders.

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    AdroFx's strongest offering is its 60+ currency pairs, which can be traded with very high leverage up to 1:500. The broker also offers competitive forex spreads starting from 0.4 pips and charges no commission. Additionally, traders have access to MetaTrader 4, which was built for forex trading and offers excellent support for technical analysis and algo trading.

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    Start trading on dozens of currencies at RoboMarkets with powerful analysis tools and pattern recognition technology. 35+ currency pairs are available with tight spreads from 0 pips and rapid market execution. You can also utilise the broker's forex news alerts and economic calendar.

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    Core Spreads offers trading on 34 forex pairs through spread betting and 40 currencies through CFDs, with both vehicles covering major and minor pairs. Spread betting spreads start from 0.6 for EUR/GBP; CFD spreads are variable and start from 1.2 pips on EUR/GBP.

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    M4Markets offers 45+ currencies with zero pip spreads. The low latency and 30-millisecond execution speeds makes the broker a decent choice for forex traders. Additionally, there are no restrictions on trading strategies, including scalping.

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    MultiBank FX offers trading on 50+ major, minor and exotic currency pairs. Spreads are tighter than many competitors and the broker offers higher leverage than most alternatives. Automated trading strategies are also permitted.

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    I’m happy with Tradeview’s strong range of 60+ currency pairs spanning majors, minors and exotics with competitive spreads from 0 pips in the $1000 ILC account. Traders can choose from several platforms, but I was particularly impressed with the feature-rich Currenex platform which is designed specifically for currency trading.

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    Trade Nation offers over 30 of the most popular forex pairs with variable spreads. Traders can access a slick proprietary platform or MetaTrader 4, with real-time forex market updates and insights via 'Smart News'.

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    As well as a competitive selection of 55+ forex pairs, traders can access high leverage up to 1:300. You can also enjoy advanced analysis from Trading Central with easy integration into MetaTrader 4.

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    Traders can access a decent range of 60+ major, minor and exotic forex pairs through standard and ECN accounts with tight spreads from 0.5 and 0.0, respectively. Execution speeds are also faster than most competitors at 50ms, which will appeal to active forex traders.

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    4xCube offers 60+ currency pairs with competitive trading conditions. We like that all trading strategies are permitted including scalping and hedging.

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    ActivTrades is a great broker for active forex traders with industry-low spreads from 0.5 pips and zero commissions. The forex broker also offers impressive execution quality and speeds, alongside award-winning customer service.

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    BlackBull offers 64 forex pairs with very competitive pricing through its ECN accounts, with the standard commission-free spread starting from 0.8 and spreads with commission starting from zero. The broker supports diverse trading platforms including MT4 and MT5, and provides leverage up to 1:500.

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    LQDFX offers an extensive list of 70+ currency pairs, more than most alternatives. Spreads are low, coming in at 0.2 pips for EUR/GBP during peak market hours and the low/no commission models will suit beginners and high-volume forex traders.

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    RoboForex offers trading on 30+ currency pairs, trailing category leaders like Pepperstone with its 90+ forex assets. That said, the Prime and ECN accounts feature competitive average spreads of 0.1 pips on the EUR/USD. Additionally, with a minimum investment of $100, traders can utilize the CopyFX system to replicate the strategies of seasoned currency traders.

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    Swissquote offers trading on a huge range of forex assets, covering 80+ currency pairs. Spreads start from 1.3 pips with the Premium account and there are zero commissions. Micro, mini and standard lot sizes are available plus options contracts on major currencies.

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    SimpleFX offers a competitive suite of 60 forex pairs with average spreads of 0.9 pips. The charting features are extensive, with convenient mobile and desktop access for all experience levels.

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    You can go long or short on over 50 forex pairs from majors to exotics, with competitive spreads as low as 0.1 pips. The broker offers the leading charting software, MetaTrader 4, which delivers a host of advanced features, including 9 timeframes and over 30 indicators.

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    FXDD continues to offer a leading selection of 90+ currency pairs with ECN pricing. Spreads are decent, coming in at 0.4 pips for EUR/USD during testing. That said, these quotes aren’t as narrow as top competitors like Pepperstone.

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    Trade on 45+ majors, minors, crosses and exotics, with competitive pricing, ultra-fast execution and no requotes. Newer traders can access zero-commission trading. Experienced forex traders can operate with no trading restrictions and benefit from an ECN account and a VPS service.

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    FXTrading clients can access 70+ forex pairs with high leverage up to 1:500, fast execution averaging 80ms, excellent liquidity and spreads from zero. A good selection of minors and exotics are available as well as all the majors. New users can start trading forex in 4 easy steps.

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    With over 190 forex spot pairs, EZ Invest outperforms many rivals in terms of access to the currency markets. Users can also choose between desktop software, a webtrader plus a solid mobile app. On the negative side, spreads aren't the tightest on entry accounts.

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    Trade 50+ forex pairs via the MetaTrader 4 and MetaTrader 5 platforms with leverage up to 1:500, immediate execution, deep liquidity and tight spreads.

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    Fortrade offers 60+ currency pairs including a good selection of majors, minors and exotics. Trading takes place via MT4 or Fortrade's proprietary, low-latency terminal, and spreads on the USD/GBP pair average a reasonable 2 pips.

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    FP Markets is a good option for forex traders, with 70+ pairs covering an excellent range of currencies. Spreads are already tight on standard accounts and start from zero on raw spread accounts, and the broker offers high leverage up to 1:500 and top-tier liquidity.

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    IronFX continues to offer a strong selection of 80 currency pairs. You can trade through the market-leading MT4 platform with a range of forex market research tools. That said, commission charges in the zero-spread accounts are high, starting from $13.50 per lot.

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    Trade 80+ major, minor and exotic forex pairs. This is a very competitive range of currency pairs with 50+ exotics to choose from, and traders will benefit from fast execution and support from extra features including a pip calculator. The MetaTrader 4 software was also designed for online forex trading.

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    Libertex offers CFD trading on 50+ forex pairs, offering long and short opportunities. Its strength comes in its tight spreads – we were offered 0.2 pips for EUR/USD.

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    NordFX offers a modest range of 33 major and minor forex pairs. Disappointingly, there are no exotic pairs, though traders do benefit from tight spreads from 0.0 pips and low commissions from 0.0035% per side.

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    HYCM offers 40+ forex pairs, with most available to trade on either the MT4 or MT5 platform. The maximum leverage on offer is 1:30 in accordance with regulations, and tight spreads start from 0.2 on the Raw account and from 1.2 on the commission-free Classic account.

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    FXOpen clients can trade 50+ forex pairs (28 on micro accounts) with leverage up to 1:30. Fees are competitive with spreads starting from zero with a small commission on ECN accounts, and slightly wider spreads and no commission on STP accounts.

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    Hantec Markets offers a limited range of 30+ forex pairs – less than most top brands, including Pepperstone with 100+. That said, market execution is rapid based on tests, and spreads are competitive starting at just 0.2 pips. This, combined with access to the popular MT4 platform with 30+ technical indicators, ensures a relatively complete trading experience for short-term currency traders.

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    With 60+ currency pairs available, Dukascopy offers enough majors, minors and exotics to keep most forex traders happy. The broker also offers high leverage up to 1:100 – a good amount to see from a reputable and regulated broker. Currency traders have access to excellent software, including MT4 and JForex.

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    Speculate on popular currency pairs with flexible leverage up to 1:500 and zero-pip spreads in the GO Plus account. Commission-free trading is available with micro, mini and standard forex contract sizes.

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    Trade a wide selection of 80+ currency pairs with spreads from 0.5 pips and industry-favorite platforms. City Index has 40+ years experience in forex trading with liquidity from tier-one banks.

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    ThinkMarkets offers 46 currency pairs, which is around the industry average. Forex traders can benefit from tight 0.0-pip spreads for EUR/USD during peak market hours. Additionally, the ThinkTrader proprietary platform offers an impressive 125+ technical indicators - ideal for complex forex strategies.

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    CMC presents an extensive array of 300+ forex pairs characterized by tight spreads and rapid executions, surpassing the offerings of many competitors in terms of currency diversity. Forex indices also present a fairly unique and holistic way to speculate on the value of key currencies like the USD, EUR and GBP.

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    FXTM offers a strong range of 60+ currency pairs - more than many competitors including AvaTrade. There’s also 6 currency indices for traders looking to diversify their forex portfolios. The brand’s ECN account offers competitively low spreads from 0 pips, with equally low commissions up to $2 per lot.

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    easyMarkets continues to offer 60+ forex pairs including majors, minors and a selection of exotics, with fixed spreads from 1.8 pips or variable spreads from 0.8 pips. FX traders can access advanced trading software in MetaTrader, as well as very high leverage up to 1:2000.

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    Fusion Markets offers an excellent selection of 90+ currency pairs, providing a range of short-term trading opportunities. It continues to excel for its ultra-tight spreads from 0.0 pips and exceptionally low commissions of $2.25 per side. You also get access to leading forex software in MetaTrader 4.

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    FXCM offers an average range of 40+ currency pairs, although there are no commissions and spreads are competitive from 0.78 pips for EUR/USD. The broker also offers 3 forex baskets covering USD, Yen and emerging markets benchmarks.

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    InstaForex's range of 100+ currency pairs is among the largest we have seen. ECN spreads are also available from 0.0 pips with zero commissions. Minimum deposits start from $1 making the broker accessible for beginners. You can also access market-leading forex analysis and insights.

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    Trade 200 CFD forex pairs with DMA pricing and tight spreads, ultra low latency and high leverage up to 1:1000. The range of forex pairs available and pricing model are among the most attractive in the African market.

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    Capital.com offer a long list of forex CFD pairs for trading. All have competitive spreads. The firm also ensures negative balance protection

Entry Rules

The MACD indicator is set to 5,13,1 and attached to the chart. Here are the entry rules.

This strategy depends on watching the price action candles at 0800hrs, 1200hrs, 1600hrs and 2000hrs. Study the price action chart 10 minutes before these times, and watch the previous 3 previous MACD signals at these times.

Chart showing entry rules for long and short positions 

Long Entry

The entry candle for a long order is the candle at 0800hrs. Take a look at the MACD value on the previous 4hr candle located at the 0400hrs point, and then go further backwards to look at the previous candle located at 2000hrs. If there is difference of +50 from the MACD value on the 2000hrs (previous day) candle and the MACD value at 0400hrs (the candle before the signal candle), then go long at the open of the 0800hrs candle.

  1. At point A where we have the 2000hrs candle, the MACD value is 241.
  2. At point B where we have the 0400hrs candle, the MACD value is 476.

Since the value of MACD at the 2000hrs candle is lesser than the MACD value at the 0400 hrs candle, the difference between the two values is + 235 (which is much higher than +50) and the bias for the trade is bullish. As such, the trader should immediately go long at the open of the 0800 hrs candle. We can see that the price action climbed into profits thereafter.

The success of this trade depends almost wholly on the trader’s ability to detect the correct candles as well as check the correct values of the MACD indicator at these points.

The short entry candle above is the 0800hrs candle. Each candle on 4 hour chart lasts 4 hours. Moving the cursor of the mouse to the top of a bullish candle (the transparent ones) on MT4 will reveal the time the candle opened. In addition, moving the mouse cursor to the bottom of a bearish candle (the opaque ones) will show the time the candle opened. Similarly, moving the cursor to the MACD bars will show the MACD value.

Following these rules will avoid the problem of applying trade signals to wrong candles.

Short Entry

For a short entry, we would be looking to see if the difference in the value of the MACD between the previous day’s 2000hrs candle and the previous candle before the entry candle (0400hrs candles) is -50. Repeat the MACD evaluation as described above for the long entry, but this time, check to see if the difference between the 2000hrs candle and the 0400hrs candle is -50. If this is the case, then the trader should go short at the 0800hrs candle.

We need to understand that the values of +50 or -50 are the minimum values required for generating the signal. The more positive the difference, the stronger the long entry signal. Similarly, the more negative the MACD difference, the stronger the sell signal.

  1. At point A where we have the 2000hrs candle, the MACD value is 1371.
  2. At point B where we have the 0400hrs candle, the MACD value is 351.

Since the MACD value at the 2000hrs candle is greater than the MACD value at 0400 hrs, the difference between the two values ( – 1020 which is much higher than -50) confers a bearish bias for the currency asset. As such, the trader should immediately go short on the open of the 0800 hrs candle. We can see that the market dropped and would have put the trader into profit if he went short.

Exit Rules

Position 1: Set the Take Profit level at 30pips and take the Stop Loss at 30pips.
Position 2: Set Take Profit at 45 pips and take the Stop Loss at 30 pips. Once you are 30 pips in profit, close half the position and move the stop loss level to break even point (i.e. to entry point).

The trader can also use levels of support and resistance as a benchmark for trade exits.