The Legacy Trader MT4 forex indicator is an enhanced version of the traditional Parabolic SAR technical indicator.
It provides you with easy to read short-term buy and sell trading signals in the direction of the prevailing trend.
Moreover, the Legacy Metatrader 4 indicator displays the most current trend in the upper right corner of the chart.
The trend is either an “uptrend” or a “downtrend.
Legacy Trader draws magenta and aqua dots above or below the price bars.
Magenta dots suggest there’s a short-term uptrend, and traders look to buy the currency pair.
Aqua dots suggest there’s a short-term downtrend, and traders look to sell the currency pair.
A stop-loss is typically placed 1-3 pips above (for sell) or below (for buy) the Legacy Trader dots.
You can trail your stop-loss up (for buy signal) or down (for sell signal) to lock in profits or to reduce the risk on the open trade.
Use this forex indicator to take advantage of short-term movements in the currency market.
It’s a popular indicator for scalping and day trading purposes.
Free Download
Download the “legacy-trader-indicator.mq4” MT4 indicator
Indicator Chart (AUD/USD M5)
The AUD/USD 5-Minute chart below displays the Legacy Trader Metatrader 4 Forex indicator in action.
Basic Trading Signals
Signals from the Legacy Trader MT4 forex indicator are easy to interpret and go as follows:
Buy Signal: A buy signal occurs when the Legacy Trader indicator draws an aqua dot below the candlestick.
Sell Signal: A sell signal occurs when the Legacy Trader indicator draws a magenta dot above the candlestick.
Trade Exit: Close the open buy/sell trade when an opposite signal occurs, or use your own method of trade exit.
Legacy Trader + ZWinner Trend Forex Day Trading Strategy
This MT4 trading strategy combines the power of two proven indicators: the Legacy Trader Indicator for MT4 and the ZWinner Trend Indicator for MT4.
Both tools complement each other well. Legacy Trader provides clear buy and sell signals through aqua and magenta dots.
ZWinner Trend offers trend confirmation using simple green and red histogram bars.
Because the strategy combines a signal indicator with a trend filter, it works well for day traders who want structure and clarity.
It performs best on M15, M30, and H1 time frames, especially during London and New York sessions where price movement is cleaner.
Beginners can follow the rules without confusion, while experienced traders can use it to boost accuracy by filtering out low quality signals.
Buy Entry Rules
- An aqua dot appears from the Legacy Trader Indicator
- The ZWinner Trend histogram shows green bars
- Place the stop loss a few pips below the recent swing low
- Take profit at 1:1.5 or 1:2 risk reward, or close when a magenta dot appears
Sell Entry Rules
- A magenta dot appears from the Legacy Trader Indicator
- The ZWinner Trend histogram shows red bars
- Place the stop loss a few pips above the recent swing high
- Take profit at 1:1.5 or 1:2 risk reward, or close when an aqua dot appears
Advantages
- Easy to follow and suitable for new traders
- Combines signals with trend confirmation
- Reduces false entries in choppy markets
- Clear trading system without complex analysis
Drawbacks
- Can give fewer signals when the market moves sideways
- Trend continuation trades sometimes occur late
- Not ideal during low volume Asian hours
- False breaks still occur during news events
Example Case Study 1
On EURUSD M30 during the London session, price pulled back into a minor support zone.
The Legacy Trader Indicator printed a fresh aqua dot near the end of the retracement.
At the same time, the ZWinner Trend histogram stayed green, showing that the main trend was still bullish.
A buy trade was placed with a stop loss below the recent swing low.
The pair gained momentum as the session unfolded, climbing steadily.
A 1:2 reward target was reached within two hours.
The move measured about 28 pips from entry to take profit, offering a clean continuation aligned with the overall trend.
Example Case Study 2
On GBPJPY M15 during the New York open, volatility increased after a consolidation phase.
A magenta dot appeared from the Legacy Trader Indicator at the top of a small pullback.
The ZWinner histogram turned fully red at the same time, indicating fresh bearish pressure.
A sell trade was opened with a stop loss placed a few pips above the nearest swing high.
The pair dropped quickly for the next forty minutes.
The 1:1.5 target was hit smoothly, yielding approximately 34 pips of profit.
Although GBPJPY moves quickly, the combination of a clear entry signal and a strong bearish trend made the trade straightforward.
Strategy Tips
- Focus on clean trending markets. When the histogram stays green or red for several bars, signals from the dots tend to perform much better.
- Wait for the candle to close before acting on an aqua or magenta dot. Entering early often leads to premature entries during spikes.
- Check the higher time frame trend. If the M15 chart gives a buy signal but the H1 trend is still bearish, reduce your position size or skip the trade.
- Use session timing to your advantage. The strategy performs best during the London session and the first half of New York when momentum is strongest.
- Avoid taking trades inside tight ranges. When the market is moving sideways and ZWinner constantly flips between green and red, stay out and wait for a clean breakout.
- Trail your stop once price moves in your favor. This helps capture larger moves when the histogram remains in the same direction for an extended period.
- Protect yourself during major news releases. Even a perfect dot plus histogram setup can fail when volatility spikes unexpectedly.
- Do not force trades. If you miss a signal or the candle closes too fast, move on and wait for the next clean setup.
Download Now
Download the “legacy-trader-indicator.mq4” Metatrader 4 indicator
MT4 Indicator Characteristics
Currency pairs: Any
Platform: Metatrader 4
Type: Chart pattern indicator
Customization options: Variable (Nbars) Colors, width & Style.
Time frames: 1-Minute, 5-Minutes, 15-Minutes, 30-Minutes, 1-Hour, 4-Hours, 1-Day, 1-Week, 1-Month
Type: Trend
