Hodrick Prescott MA Indicator (MT4)

About the Hodrick Prescott MA Indicator

The Hodrick Prescott MA indicator for Metatrader 4 is a trend-following tool built around a custom moving average crossover system.

Its main purpose is to help traders identify major market direction changes and stay positioned with the dominant trend.

The indicator is based on the Hodrick-Prescott moving average, a custom-built average designed to smooth price action while still reacting to meaningful trend shifts.

It plots two colored moving averages directly on the main MT4 chart and generates signals whenever these lines cross.

When the faster yellow moving average crosses the slower red moving average, the indicator highlights a potential trend reversal or continuation point.

Thanks to its clean display and crossover logic, the Hodrick Prescott MA indicator is easy to understand and suitable for traders who prefer systematic trend trading.

Free Download

Download the “Hodrick Prescott MA.mq4” indicator for MT4

Key Features

• Custom Hodrick-Prescott moving average calculation
• Two colored moving averages plotted on the price chart
• Crossover signals indicating trend direction changes
• Designed for medium- and long-term trend trading

Indicator Chart

The chart example shows the Hodrick Prescott MA indicator on an MT4 price chart.

The yellow and red moving averages cross when market direction shifts, highlighting potential buy and sell opportunities in line with the emerging trend.

Guide to Trade with Hodrick Prescott MA

Buy Rules

• Wait for the yellow moving average to cross above the red moving average
• Confirm the crossover occurs after a completed candle
• Open a buy trade at the start of the next candle

Sell Rules

• Wait for the yellow moving average to cross below the red moving average
• Confirm the crossover occurs after a completed candle
• Open a sell trade at the start of the next candle

Stop Loss

• For buy trades, place the stop loss below the most recent consolidation low
• For sell trades, place the stop loss above the most recent consolidation high

Take Profit

• Hold the position until an opposite crossover occurs
• Alternatively, target a fixed multiple of the stop loss distance

Practical Tips

• Avoid trading crossovers during sideways market phases
• Allow enough room for trades to develop, as trend moves take time
• Use the indicator as a trend filter rather than a scalping tool

Hodrick Prescott MA + MACD Trend Histogram Bars Scalping Strategy for MT4

This MT4 scalping strategy combines trend bias from the Hodrick Prescott MA Indicator with precise entry signals from the MACD Trend Histogram Bars Indicator.

The Hodrick Prescott MA shows trend direction: when the yellow line crosses above the red line, it signals a bullish bias; when it crosses below, it indicates bearish bias.

The MACD Histogram Bars provide real-time scalping signals, with green bars indicating buys and red bars indicating sells.

This combination is ideal for short-term trades in high liquidity pairs.

This strategy is optimized for M5 and M15 timeframes, perfect for scalpers who want quick trades with clearly defined risk and profit targets.

It works best on major currency pairs like EURUSD, GBPUSD, and USDJPY where spreads are tight and price movements are smooth.

Buy Entry Rules

• Ensure the Hodrick Prescott MA yellow line is above the red line, signaling bullish bias.
• Wait for the MACD Trend Histogram Bars to turn green.
• Enter a buy trade immediately at the close of the green histogram bar.
• Place a tight stop loss 10–15 pips below the entry candle low.
• Set a take profit of 15–25 pips or use a 1:1.5 risk-to-reward ratio for quick scalps.

Sell Entry Rules

• Ensure the Hodrick Prescott MA yellow line is below the red line, signaling bearish bias.
• Wait for the MACD Trend Histogram Bars to turn red.
• Enter a sell trade at the close of the red histogram bar.
• Place a stop-loss 10–15 pips above the entry candle’s high.
• Set a take profit of 15–25 pips or 1:1.5 risk-to-reward ratio.

Advantages

• Clear trend bias combined with real-time scalping signals.
• Quick trades allow for multiple daily opportunities.
• Works best on liquid pairs with low spreads.
• Simple visual setup for both beginners and advanced scalpers.

Drawbacks

• Scalping requires fast execution and tight spreads.
• Signals can fail during sudden news spikes.
• High-frequency trading can lead to overtrading if rules aren’t strictly followed.

Case Study 1: EURUSD M5 Setup

EURUSD showed bullish bias as the Hodrick Prescott MA yellow line crossed above the red line.

The MACD Histogram turned green, providing a buy entry at 1.0815.

Stop loss was set at 1.0805 and take profit at 1.0830.

Price moved steadily and the target was hit in under 20 minutes, achieving a 15-pip scalp.

Case Study 2: GBPUSD M15 Setup

GBPUSD displayed bearish bias with the yellow line below the red line.

The MACD Histogram turned red, signaling a sell.

Entry at 1.2650, stop loss at 1.2665, take profit at 1.2630.

The trade closed in 30 minutes with a 20-pip profit.

The trend bias ensured the scalping move followed the overall direction of the market.

Real Backtest Results (Deep Research Data)

Strategy Tips

• Trade only during high liquidity sessions like London and New York.
• Strictly follow the stop loss and take profit levels to avoid overtrading.
• Confirm trend bias from Hodrick Prescott MA before taking MACD histogram signals.
• Use this scalping setup on pairs with low spreads for maximum efficiency.
• Keep a trading journal to refine timing and identify the most profitable pairs.

This scalping system leverages trend direction and momentum confirmation for fast, repeatable trades on MT4.

When executed with discipline, it provides a consistent edge in short-term markets.

Download Now

Download the “Hodrick Prescott MA.mq4” indicator for Metatrader 4

FAQ

Does the Hodrick Prescott MA indicator repaint?

No, crossovers are based on closed candles, which helps prevent signals from changing after they appear.

Which trading style fits this indicator best?

The indicator is best suited for swing and trend traders who aim to capture sustained directional moves.

Can it be used on lower time frames?

Yes, but lower time frames may produce more frequent crossovers and reduced reliability compared to higher charts.

Is the indicator difficult to configure?

The default settings work well for most markets, making it easy to use without complex adjustments.

Summary

The Hodrick Prescott MA indicator offers a straightforward approach to trend trading using a dual moving average crossover system.

Its custom smoothing logic helps highlight meaningful trend changes while filtering out minor price fluctuations.

The indicator is easy to apply, visually clean, and effective for traders who want to follow major market direction.

When used with patience and proper risk management, it can become a solid component of a consistent MT4 trading routine.