About the Forecasting Moving Average Indicator
The Forecasting Moving Average Indicator for MT4 is designed to help traders anticipate future price movements using a custom-built moving average algorithm.
It projects potential trend directions, allowing traders to prepare for upcoming market shifts before they happen.
Displayed on the main MT4 chart as a purple moving average, the indicator includes a yellow segment that forecasts future trend direction.
When the yellow segment points upward, the market is expected to continue rising; when it points downward, a decline is anticipated.
This indicator is ideal for traders who want to plan entries and exits in advance and can be combined with other technical tools to improve confirmation and overall trade accuracy.
Free Download
Download the “forecasting-indicator.ex4” indicator for MT4
Key Features
- Custom moving average that forecasts future price trends
- Purple line shows current trend, yellow segment predicts direction
- Helps identify potential bullish or bearish moves ahead of time
- Non-repainting and easy to interpret for quick decision-making
- Compatible with other trend or momentum indicators
Indicator Chart
The chart shows a purple moving average line with a yellow segment projecting forward.
The upward slope of the yellow line suggests bullish momentum, while a downward slope indicates potential bearish movement.
Traders can follow the forecasted path for timely trade planning.
Guide to Trade with Forecasting Moving Average Indicator
Buy Rules
- Open a buy trade when the yellow segment of the MA is moving upward.
- Confirm with recent bullish candlestick patterns or short-term momentum indicators.
- Optional: wait for a small pullback to improve the entry price.
Sell Rules
- Open a sell trade when the yellow segment of the MA is moving downward.
- Confirm with bearish price action or momentum tools.
- Optional: ensure no strong support level immediately below the current price to avoid early exits.
Stop Loss Placement
- Buy trades: just below the last minor swing low or support level.
- Sell trades: just above the last minor swing high or resistance level.
Take Profit Targets
- Set profit near the next significant support or resistance level.
- Consider partial exits when the yellow forecast line starts flattening or reversing.
- Trailing stops can be used to capture extended moves while protecting profits.
Practical Trading Tips
- Best used in trending markets to follow forecasted moves.
- Combine with momentum or confirmation indicators to reduce false entries.
- Observe higher timeframe trends for additional confirmation.
MT4 Trading Strategy: Forecasting Moving Average + Volatility Hyper Trend
This strategy uses the Forecasting Moving Average Indicator together with the Volatility Hyper Trend Indicator to identify high-probability intraday trades.
The Forecasting Moving Average is bullish when the price stays above its purple line and bearish when the price drops below.
The Volatility Hyper Trend provides an additional filter: it is bullish when the green line crosses above the red line and bearish when the blue line sits above the green line.
This indicator also gives arrows directly on the chart — blue arrows mark potential buy setups, and red arrows show potential sell setups.
Combining both indicators helps traders filter out weak signals and enter only the strongest moves on 5-minute, 15-minute, or 30-minute charts.
Buy Entry Rules
- Price must be trading above the purple Forecasting Moving Average line.
- The green line of the Volatility Hyper Trend must be above the red line, confirming bullish conditions.
- Preferably, a blue arrow from the Volatility Hyper Trend appears on the chart to signal entry.
- Enter a buy order at the close of the confirming candle.
- Place a stop loss a few pips below the nearest swing low or below the purple Forecasting Moving Average.
- Set take profit at the next resistance level, channel top, or using a fixed pip target (for example, 15–25 pips depending on volatility).
Sell Entry Rules
- Price must be trading below the purple Forecasting Moving Average line.
- The blue line of the Volatility Hyper Trend must be above the green line, confirming bearish conditions.
- Preferably, a red arrow from the Volatility Hyper Trend appears on the chart to signal entry.
- Enter a sell order at the close of the confirming candle.
- Place a stop loss a few pips above the nearest swing high or above the purple Forecasting Moving Average.
- Set take profit at the next support level, channel bottom, or using a fixed pip target (for example, 15–25 pips depending on volatility).
Advantages
- Combines trend direction (Forecasting Moving Average) with volatility-based confirmation (Volatility Hyper Trend) for higher accuracy.
- Clear color and arrow signals make it easy to identify entries quickly.
- Effective on short intraday timeframes for scalping or fast day trading.
- Flexible take profit approach using either fixed pips or support/resistance levels.
Drawbacks
- May produce false signals during flat or extremely low-volatility markets.
- Requires watching multiple conditions (lines + arrows) before entry.
- Less suitable for long-term holding trades due to its intraday nature.
- Needs discipline to avoid early entries before confirmation.
Case Study 1: AUD/USD on 15-Minute Chart
During the London session, the price was trading above the purple Forecasting Moving Average.
The green line of the Volatility Hyper Trend crossed above the red line, and a blue arrow appeared.
A buy trade was taken at 0.6625.
The recent swing low was at 0.6615, placing the stop loss at 0.6612 (13 pips risk).
The next resistance level stood at 0.6648, which was used as the take profit target.
Price moved steadily upward and reached the target, giving a 23-pip profit.
Case Study 2: EUR/GBP on 5-Minute Chart
During the New York session, the price moved below the purple Forecasting Moving Average.
The blue line of the Volatility Hyper Trend held above the green line, and a red arrow appeared.
A sell order was opened at 0.8598.
The recent swing high was at 0.8609, placing the stop loss at 0.8611 (13 pips risk).
The next support area was 0.8580, which was used as the take profit target.
Price dropped quickly and hit the target, resulting in an 18-pip profit.
Strategy Tips
- Stick to major pairs during active market sessions for stronger moves and lower spreads.
- Always wait for both the line conditions and an arrow confirmation before entering.
- Use nearby support or resistance for take profit instead of a fixed risk-to-reward to adapt to changing market conditions.
- Consider trailing your stop once the price moves in your favor to lock in profits.
- Avoid trading around major news releases when volatility spikes unexpectedly.
Download Now
Download the “forecasting-indicator.ex4” indicator for Metatrader 4
FAQ
How does the yellow segment forecast future trends?
The yellow part of the moving average is calculated using a proprietary algorithm that extends the current trend into the near future based on recent price action.
How should I combine it with other indicators?
It works well with momentum indicators, oscillators, or support/resistance tools to confirm potential entries and exits before executing trades.
Summary
The Forecasting Moving Average Indicator for MT4 provides a forward-looking perspective on price trends using a unique moving average algorithm.
Its yellow forecast segment allows traders to anticipate bullish or bearish movements, making it a valuable tool for planning entries and exits.
By combining it with confirmation indicators or higher timeframe analysis, traders can enhance trade accuracy and manage risk more effectively.
Its simplicity, non-repainting design, and clear visual cues make it suitable for both new and experienced Forex traders.
