The Kaufman Forex Signal indicator for mt4 (Metatrader 4) delivers excellent buy and sell signals in real-time on the chart.
The indicator can be used as a standalone trading tool for both trade entry and exit or as an additional trend-following filter that works together with an existing strategy of system.
Kase Permission Stochastic Histogram gets displayed in the main MT4 chart window in the form of colored buy & sell dots.
Buy & Sell Trade Example
- Initiate a buy order as soon as the first blue dot appears on the chart.
- Initiate a sell order as soon as the first yellow dot appears on the chart.
The indicator works equally well on all currency pairs (majors, minors and exotic) and shows promising results if used correctly.
Free Download
Download the “Kaufman.mq4” indicator for MT4
Indicator Chart (EUR/USD M5)
The example chart below displays the Kaufman Forex Signal 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 Kaufman Forex Signal 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: Signal
Does the indicator repaint? No.
Kaufman + XP Moving Average MT4 Day Trading Strategy
This MT4 strategy combines the Kaufman Forex Signal indicator and the XP Moving Average indicator to create a clean and reliable day trading setup.
The Kaufman indicator identifies the main market direction, showing blue dots for bullish conditions and yellow dots for bearish ones.
The XP Moving Average provides precise entry signals with a green line for buy and a red line for sell.
The logic behind this strategy is simple. The Kaufman indicator filters the overall trend, while the XP Moving Average identifies short-term timing opportunities.
By aligning both, traders focus on higher probability setups and avoid trading against the prevailing market sentiment.
The method performs best on M5, M15, and H1 charts during active sessions like London and New York.
It suits traders who prefer clarity and consistency over complicated systems.
Buy Entry Rules
- Wait until the Kaufman indicator displays blue dots, showing an active bullish trend.
- Confirm that the XP Moving Average line turns green and slopes upward.
- Enter a buy trade at the candle close after the green confirmation.
- Place a stop loss a few pips below the most recent swing low.
- Set take profit at 1.5x to 2x the stop loss distance or trail the stop to capture extended moves.
Sell Entry Rules
- Wait until the Kaufman indicator displays yellow dots, showing a bearish trend.
- Confirm that the XP Moving Average line turns red and slopes downward.
- Enter a sell trade at the candle close after the red confirmation.
- Place a stop loss a few pips above the most recent swing high.
- Set take profit at 1.5x to 2x the stop loss distance, or use a trailing stop when the move extends strongly.
Advantages
- Simple structure suitable for all experience levels.
- Combines a trend filter and a timing tool for more accurate entries.
- Reduces emotional decision-making during volatile sessions.
- Adaptable to multiple forex pairs and timeframes.
- Easy to automate with alerts or scripts.
Drawbacks
- False signals can appear during sideways market phases.
- Lagging effect from moving averages may reduce reward potential.
- Requires consistent risk management to maintain profit stability.
- Performance depends on session volatility and pair behavior.
Case Study 1 – EURUSD M15 London Session
During the London open, EURUSD formed a steady bullish channel.
The Kaufman indicator printed blue dots for over an hour, confirming upward momentum.
When the XP Moving Average turned green, a long position was opened.
The stop loss was set 20 pips below the entry, and the take profit aimed for 40 pips.
Within 90 minutes, the price reached the target with a clean structure and minimal drawdown.
The alignment of both indicators filtered out false reversals and kept focus on the main intraday trend.
The strategy achieved a 2:1 risk-to-reward ratio with clear exit management.
Case Study 2 – USDJPY M5 New York Session
In the New York afternoon, USDJPY began consolidating before breaking lower.
The Kaufman indicator shifted from blue to yellow dots, signaling a potential bearish trend.
The XP Moving Average turned red soon after, confirming a sell setup.
The trade was executed with a 15-pip stop loss and a 30-pip take profit.
The pair dropped sharply within half an hour and hit the target quickly.
The trailing stop locked in an extra 10 pips as the price continued downward.
The example highlights how both indicators confirm momentum, reducing hesitation and improving timing accuracy.
Strategy Tips
- Trade during major sessions with enough volatility for clean signals.
- Avoid trading in very flat markets where both indicators frequently change color.
- Adjust stop loss and take profit to match each currency pair’s volatility.
- Keep risk per trade low while you test and adapt the system.
- Use a trailing stop or partial profit booking to capture extended intraday moves.
- Always confirm that both indicators align before entering a trade.
This Kaufman + XP Moving Average MT4 strategy helps traders find directional setups with better accuracy.
It filters noise, provides structured entries, and maintains consistent results when applied with discipline.
For best performance, stick to active trading hours and manage each position carefully.
