The Powertrend MT4 forex indicator is a trend following signals technical indicator based on Average True Range.
Powertrend draws buy and sell trading lines on the chart for any pair and works for any timeframe.
Blue indicator lines indicate there’s an uptrend.
Red indicator lines indicate there’s a down trend.
The default ATR period is set at 3 but can be tweaked to whatever ATR period you want to start using.
The Powertrend forex indicator is suitable for scalping, day trading and swing trading currency pairs.
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Download the “bat-atr.mq4” MT4 indicator
Indicator Chart (EUR/USD M30)
The EUR/USD M30 chart below displays the Powertrend forex indicator in action.
Basic Trading Signals
Signals from the Powertrend MT4 forex indicator are easy to interpret and go as follows:
Buy Signal: Initiate a buy trade when the indicator draws the start of a blue line (bullish).
Sell Signal: Initiate a sell trade when the indicator draws the start of a red line (bearish).
Trade Exit: Close the open trade when an opposite signal occurs, or use your own method of trade exit.
PowerTrend and SMA Crossover Signal MT4 Forex Strategy
This MT4 forex strategy combines the trend-following PowerTrend MT4 Forex Indicator with the precise trend confirmation from the SMA Crossover Signal MT4 Forex Indicator.
It is designed for M5, M15, and H1 charts, making it suitable for both short-term and intraday trades.
The strategy is ideal for traders who want clear visual cues for entry and exit while staying aligned with the dominant trend.
The PowerTrend indicator uses a colored line to indicate trend direction.
A blue line signals a buy opportunity, while a red line signals a sell opportunity.
The SMA Crossover Signal indicator provides additional trend confirmation with arrows.
A green arrow indicates a buy trend, while a red arrow indicates a sell trend.
Using both indicators together ensures that trades are aligned with the prevailing trend and supported by a secondary confirmation signal.
This strategy works best on major currency pairs and gold during active market sessions and helps traders capture high-probability moves efficiently.
Buy Entry Rules
- The PowerTrend line must be blue, indicating a bullish trend.
- Check the SMA Crossover Signal indicator for a green arrow confirming the trend.
- Enter a buy trade at the close of the candle where both indicators align.
- Place the stop loss below the most recent swing low or minor support level.
- Keep the trade open while the PowerTrend line remains blue and no red arrow appears.
- Close the trade immediately if the PowerTrend line turns red or a red arrow appears.
Sell Entry Rules
- The PowerTrend line must be red, indicating a bearish trend.
- Check the SMA Crossover Signal indicator for a red arrow confirming the trend.
- Enter a sell trade at the close of the candle where both indicators align.
- Place the stop loss above the most recent swing high or minor resistance level.
- Keep the trade open while the PowerTrend line remains red and no green arrow appears.
- Close the trade immediately if the PowerTrend line turns blue or a green arrow appears.
Advantages
- Combines trend-following and confirmation signals for higher probability trades.
- Trades are easy to spot on M5, M15, and H1 charts thanks to the clear signals from both indicators.
- Reduces the risk of entering countertrend trades by requiring dual indicator alignment.
- Flexible for both scalping and intraday trading depending on the chosen timeframe.
- Works on multiple currency pairs and gold without complicated settings.
Drawbacks
- Requires monitoring multiple timeframes to ensure proper trend alignment.
- Trend reversals can trigger early exits during choppy price action.
- Intraday spikes or news events can occasionally hit stop losses prematurely.
Case Study 1
On EURUSD M5 during the London session, the PowerTrend line turned blue, signaling a bullish trend.
The SMA Crossover Signal indicator displayed a green arrow after a minor retracement.
A buy trade was entered and held while both indicators remained aligned.
When the PowerTrend line turned red, the trade was closed for a profit of 27 pips, capturing a strong intraday upward move.
Case Study 2
On GBPJPY M15 during the New York session, the PowerTrend line turned red, indicating a bearish trend.
The SMA Crossover Signal indicator produced a red arrow following a brief consolidation.
A sell trade was opened and maintained while both indicators confirmed the downtrend.
When the PowerTrend line switched to blue, the trade was closed, securing a gain of 54 pips from the intraday move.
Case Study 3
On USDCHF H1 during the European session, the PowerTrend line turned blue, confirming a bullish trend.
The SMA Crossover Signal indicator showed a green arrow shortly after a small pullback.
A buy trade was entered and held as long as both indicators remained aligned.
When the PowerTrend line turned red, the trade was closed for 41 pips, capturing a solid intraday upward move.
Strategy Tips
- Only take trades when both the PowerTrend line and the SMA Crossover arrow are aligned to increase the probability of success.
- Use M5 charts for quick scalping, M15 for slightly longer intraday moves, and H1 to capture more extended trends.
- Focus on major currency pairs and gold during high-liquidity sessions to ensure stronger and more reliable price movements.
- Place stop losses near recent swing highs or lows to protect your trades from sudden reversals.
- Close trades immediately if the PowerTrend line changes color or the SMA Crossover arrow reverses to preserve profits.
- Wait for minor pullbacks before entering a trade to improve timing and reduce the risk of entering at overextended levels.
- Keep a trading journal to track which pairs, timeframes, and session hours work best with this strategy for continuous improvement.
- Consider scaling out partial positions as trades move in your favor to lock in profits while letting the remainder run with the trend.
- Always follow proper money management rules and avoid overleveraging to protect your account during unexpected market moves.
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Download the “bat-atr.mq4” Metatrader 4 indicator
MT4 Indicator Characteristics
Currency pairs: Any
Platform: Metatrader 4
Type: chart pattern
Customization options: Variable (BackPeriod, ATRPeriod, Factor, TypicalPrice) Colors, width & Style.
Time frames: 1-Minute, 5-Minutes, 15-Minutes, 30-Minutes, 1-Hour, 4-Hours, 1-Day, 1-Week, 1-Month
Type: Trend
