The KAMA Forex Trend indicator for Metatrader 4 follows the major trend with the help of custom-built moving averages.
The indicator gets displayed in the main MT4 chart window in the form of a red thick signal line.
Feel free to experiment with the kama period (default: 10).
Buy & Sell Trade Example
- Buy the asset when the candlestick closes above the red KAMA signal line (bullish trend).
- Sell the asset when the candlestick closes below the red KAMA signal line (bearish trend).
The KAMA Trend indicator can be used for trade entry or as a directional trend filter for other strategies and systems.
The indicator works equally well on all currency pairs (majors, minors and exotic) and shows promising results if used correctly.
Free Download
Download the “KAMA.mq4” indicator for MT4
Indicator Chart (EUR/USD Daily)
The example chart below displays the KAMA Trend 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 KAMA 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-following
Does the indicator repaint? No.
KAMA + XMaster Formula MT4 Scalping Strategy
This MT4 scalping strategy combines the KAMA Forex Trend Indicator and the XMaster Formula MT4 Indicator to identify high-probability intraday trades.
The KAMA indicator determines the prevailing market trend, while the XMaster Formula provides precise entry signals with its yellow arrows.
This combination works well on M1, M5, and M15 timeframes, making it ideal for active scalpers who want to capture short-term price movements with minimal risk.
Buy Entry Rules
- Confirm that the KAMA line is above the red baseline, indicating a bullish trend.
- Wait for a yellow up arrow from the XMaster Formula, signaling a buy opportunity.
- Enter a buy trade at the close of the candle with the yellow arrow.
- Place a stop loss below the most recent swing low or 10–15 pips below the entry for M1/M5 charts.
- Set a take profit at 15–30 pips for M1, 25–50 pips for M5, or use a trailing stop to follow momentum.
Sell Entry Rules
- Confirm that the KAMA line is below the red baseline, indicating a bearish trend.
- Wait for a yellow down arrow from the XMaster Formula, signaling a sell opportunity.
- Enter a sell trade at the close of the candle with the yellow arrow.
- Place a stop loss above the most recent swing high or 10–15 pips above the entry for M1/M5 charts.
- Set a take profit at 15–30 pips for M1, 25–50 pips for M5, or use a trailing stop to maximize profits.
Advantages
- Provides clear trend direction with the KAMA indicator to avoid countertrend trades.
- XMaster Formula signals give precise buy and sell entry points, reducing hesitation.
- Suitable for multiple timeframes, offering flexibility for scalpers.
- Helps manage risk with defined stop loss and take profit levels.
- Combining trend and signal indicators improves trade accuracy and consistency.
Drawbacks
- Frequent trades on lower timeframes can lead to small losses if spreads are high.
- False signals may occur during sideways or choppy market conditions.
- Requires discipline and strict adherence to stop loss rules.
- Scalping can be stressful and demands constant monitoring of charts.
Example Case Studies
Case Study 1
On the EUR/USD M5 chart, the KAMA line rose above the red baseline, confirming a bullish trend.
Shortly after, the XMaster Formula displayed a yellow up arrow.
A buy trade was entered at 1.1025 with a stop loss at 1.1015 and a take profit at 1.1040.
The trade captured 15 pips within 20 minutes, demonstrating the strategy’s effectiveness in strong intraday trends.
Case Study 2
On the GBP/USD M1 chart, the KAMA line dropped below the red baseline, signaling a bearish trend.
The XMaster Formula then showed a yellow down arrow, triggering a sell entry at 1.3080 with a stop loss at 1.3090 and take profit at 1.3065.
The trade hit its target in just 12 minutes, netting 15 pips and confirming that this strategy works well on lower timeframes for quick scalping profits.
Strategy Tips
- Always confirm the trend direction with the KAMA indicator before taking signals from the XMaster Formula.
- Avoid trading during major economic news releases, as sudden volatility can trigger stop losses prematurely.
- For beginners, start with M5 or M15 charts to reduce the number of trades and manage risk more easily.
- Use a small lot size when testing this strategy live to protect your account from sudden price swings.
- Consider using a trailing stop to lock in profits if the trend continues strongly after the initial target is reached.
