Magic FX Formula is a free mt4 (Metatrader 4) indicator that identifies and displays trend reversal signals on the trading chart.
The indicator can be used as a standalone trading tool for both trade entry and exit.
It can also be used as an additional counter-trend filter that works together with an existing strategy or system.
Buy & Sell Trade Example
- A blue vertical line represents a buy signal.
- A red vertical line represents a sell signal.
For scalping on the lower time frames, the indicator performs best during the London and New York trading sessions.
The indicator works equally well on all currency pairs (majors, minors and exotic) and shows promising results if used correctly.
Free Download
Download the “Magic Fx Formula.mq4” indicator for MT4
Indicator Chart (EUR/USD M15)
The example chart below displays the Magic FX Formula mt4 indicator in action.
Trading Tips:
Feel free to use your own favorite trade entry, stop loss and take profit method to trade with the Magic FX Formula indicator.
As always, trade in agreement with the overall trend and practice on a demo account first until you fully understand this indicator.
Please note that even the best trading indicator cannot yield a 100% win rate over long periods.
Indicator Specifications & Inputs:
Trading Platform: Developed for Metatrader 4 (MT4)
Currency pairs: Works for any pair
Time frames: Works for any time frame
Trade Style: Works for scalping, day trading and swing trading
Input Parameters: Variable (inputs tab), color settings & style
Indicator type: Trend
Does the indicator repaint? No.
Forex Trading Strategy: Magic FX Formula & 4 MAs Trend Indicator (MT4)
This intraday strategy combines the Magic FX Formula Indicator and the 4 MAs Trend Indicator on MetaTrader 4 (MT4) to capture high-probability trades.
The Magic FX Formula shows buy and sell signals using blue and red vertical lines, while the 4 MAs Trend Indicator confirms trend strength with green, red, or yellow bars.
This strategy works best on M5 and M15 charts and is suitable for pairs like EUR/USD, GBP/USD, and USD/JPY.
Buy Entry Rules
- Wait for a blue vertical line on the Magic FX Formula, indicating a buy signal.
- Ensure the 4 MAs Trend bar is green, confirming an uptrend.
- Enter a buy position at the close of the confirmed bar.
- Set a stop loss below the recent swing low or a fixed number of pips (e.g., 10-15 pips).
- Set a take profit at a risk-to-reward ratio of at least 1:2 or exit when the 4 MAs Trend bar turns red.
Sell Entry Rules
- Wait for a red vertical line on the Magic FX Formula, indicating a sell signal.
- Ensure the 4 MAs Trend bar is red, confirming a downtrend.
- Enter a sell position at the close of the confirmed bar.
- Set a stop loss above the recent swing high or a fixed number of pips (e.g., 10-15 pips).
- Set a take profit at a risk-to-reward ratio of at least 1:2 or exit when the 4 MAs Trend bar turns green.
Advantages
- Clear visual signals reduce ambiguity and improve decision-making.
- Combines trend and momentum indicators for more reliable entries.
- Effective on M5 and M15 timeframes for intraday trading.
- Helps identify short-term trend continuations and reversals.
Drawbacks
- Indicators may lag in fast-moving markets, resulting in delayed entries.
- False signals can occur during sideways or low-volatility markets.
- Requires active monitoring, which can be time-consuming on low timeframes.
Case Study 1: EUR/USD M5 Buy
On the EUR/USD M5 chart, a blue vertical line appeared on the Magic FX Formula Indicator, and the 4 MAs Trend bar turned green.
A buy position was entered at 1.1050.
Stop loss was set at 1.1035 (-15 pips), and take profit at 1.1070 (+20 pips).
The price moved upward and reached the take profit target, yielding a +20 pip gain.
Case Study 2: GBP/USD M15 Sell
During the London session on GBP/USD M15, a red vertical line appeared on the Magic FX Formula Indicator, and the 4 MAs Trend bar turned red.
A sell position was entered at 1.2800. Stop loss was set at 1.2815 (+15 pips), and take profit at 1.2775 (-25 pips).
The trade reached the take profit level, resulting in a +25 pips profit.
Strategy Tips
- Use M5 and M15 charts for intraday trading to capture quick trends.
- Focus on major currency pairs like EUR/USD, GBP/USD, and USD/JPY for better liquidity.
- Apply strict risk management with stop losses and take profit targets.
- Backtest the strategy on historical data before trading live.
- Avoid trading during major news events to reduce the risk of false signals.
Download Now
Download the “Magic Fx Formula.mq4” indicator for Metatrader 4
