The LSMA Trend Forex indicator for the MT4 platform provides easy-to-trade buy & sell trend-following signals in a separate chart window.
The indicator appears in the form of a bi-colored green and red signal line.
Buy & Sell Trade Example
- Open a buy trade when the color flips from red to green. This is a buy signal.
- Open a sell trade when the color flips from green to red. This is a sell signal.
The LSMA Trend indicator can be used as a standalone trading tool for trade entries and exits.
The indicator works equally well on all currency pairs (majors, minors and exotic) and shows promising results if used correctly.
Free Download
Download the “LSMA trend.mq4” indicator for MT4
Indicator Chart (EUR/USD M15)
The example chart below displays the LSMA Trend Forex mt4 indicator in action on the trading chart.
Trading Tips:
Feel free to use your own favorite trade entry, stop loss and take profit method to trade with the LSMA Trend Forex 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.
LSMA & XP Moving Average Forex MT4 Scalping Strategy
This MT4 scalping strategy combines the LSMA Trend Indicator and the XP Moving Average Indicator to capture fast intraday price movements.
The LSMA Trend Indicator provides a histogram: green for buy and red for sell.
The XP Moving Average Indicator displays a green line for an uptrend and red for a downtrend.
This strategy works best on 1-minute and 5-minute charts and is suitable for currency pairs like EUR/USD, GBP/USD, and USD/JPY.
Buy Entry Rules
- Ensure the XP Moving Average line is green, confirming an uptrend.
- Wait for the LSMA Trend histogram to turn green, signaling a buy.
- Enter the trade immediately after both conditions are met.
- Place a stop loss just below the most recent swing low.
- Set a take profit target of 8–15 pips or the next resistance level.
- Close the trade immediately if the LSMA Trend histogram turns red.
Sell Entry Rules
- Ensure the XP Moving Average line is red, confirming a downtrend.
- Wait for the LSMA Trend histogram to turn red, signaling a sell.
- Enter the trade immediately after both conditions are met.
- Place a stop loss just above the most recent swing high.
- Set a take profit target of 8–15 pips or the next support level.
- Close the trade immediately if the LSMA Trend histogram turns green.
Advantages
- Combines trend direction and precise histogram signals for higher accuracy.
- Works on multiple currency pairs, including EUR/USD, GBP/USD, and USD/JPY.
- Fast scalping entries and exits allow capturing small intraday moves.
- Arrow/histogram color change exit rules help protect profits and minimize losses.
- Suitable for 1-minute and 5-minute charts for active scalping traders.
Drawbacks
- Requires constant monitoring due to fast-paced scalping trades.
- Small pip targets limit profit per trade, requiring many trades to accumulate meaningful gains.
- Slippage and spread widening during high volatility can affect execution and reduce profits.
- Not ideal for traders who prefer longer-term trades or lower-frequency strategies.
- Performance may vary across different currency pairs and market sessions, requiring adjustments.
Example Case Studies
Case Study 1: EUR/USD 1-Minute Chart
The price was above the XP Moving Average line, confirming an uptrend.
The LSMA Trend histogram turned green, signaling a buy.
The trader entered the trade, set a stop loss below the swing low, and a take profit target at 10 pips.
The trade reached the target in 12 minutes.
When the LSMA histogram later turned red, the remaining position was closed, protecting gains.
Case Study 2: GBP/USD 5-Minute Chart
The price was below the XP Moving Average line, confirming a downtrend.
A red LSMA Trend histogram appeared, signaling a sell.
The trader entered the trade, set a stop loss above the swing high, and a take profit target at 12 pips.
The trade moved in favor, reaching the target.
When the histogram later turned green, the position was closed immediately, avoiding reversals.
Strategy Tips
- Use during high liquidity sessions for tighter spreads and better execution.
- Combine with support and resistance levels to improve accuracy.
- Adjust lot sizes according to account balance and risk tolerance.
- Close trades immediately when the LSMA histogram changes color to protect profits.
- Avoid overtrading by focusing on the most active currency pairs.
