The Magic Wave Forex Signal indicator for Metatrader 4 is based on the Magic Wave trade logic and delivers buy/sell signals on the chart.
The indicator pops up in the main MT4 chart window in the form of yellow and red colored trading signals.
Buy & Sell Trade Example
- Go long when the green arrow gets printed on the chart.
- Go short when the red arrow gets printed on the chart.
The Magic Wave Forex Signal indicator can be used for both trade entry and exit or as a trend-following confirmation 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 “Magic wave.mq4” indicator for MT4
Indicator Chart (EUR/USD H1)
The picture below shows the Magic Wave 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 Magic Wave 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: Trend
Does the indicator repaint? No.
Scalping Strategy: Magic Wave Forex Signal & 4 Moving Averages Buy/Sell Signals (MT4)
This scalping strategy combines the Magic Wave Forex Signal Indicator and the 4 Moving Averages Buy/Sell Signals Indicator on MetaTrader 4 (MT4).
The Magic Wave indicator provides immediate entry signals using green arrows for long trades and red arrows for short trades.
The 4 MAs indicator confirms the trend, showing green bars above 0 for uptrends and purple bars below 0 for downtrends.
This strategy works best on M1 and M5 charts and is ideal for pairs like AUD/USD, USD/CHF, and NZD/USD.
Buy Entry Rules
- Wait for a green arrow to appear on the Magic Wave indicator.
- Confirm that the 4 MAs Buy/Sell Signals indicator shows green bars above 0, indicating an uptrend.
- Enter a buy trade at the close of the confirmed bar.
- Set a stop loss below the recent swing low or a fixed pip amount (e.g., 10-15 pips).
- Set a take profit target at a 1:1.5 or 1:2 risk-to-reward ratio, or exit when the 4 MAs indicator turns purple.
Sell Entry Rules
- Wait for a red arrow to appear on the Magic Wave indicator.
- Confirm that the 4 MAs Buy/Sell Signals indicator shows purple bars below 0, indicating a downtrend.
- Enter a sell trade at the close of the confirmed bar.
- Set a stop loss above the recent swing high or a fixed pip amount (e.g., 10-15 pips).
- Set a take profit target at a 1:1.5 or 1:2 risk-to-reward ratio, or exit when the 4 MAs indicator turns green.
Advantages
- Combines fast entry signals with trend confirmation for higher probability trades.
- Clear visual signals make it easy to follow on fast timeframes.
- Effective on M1 and M5 charts for intraday scalping.
- Suitable for major currency pairs with good liquidity.
Drawbacks
- Scalping can be stressful due to fast decision-making requirements.
- Frequent small losses can accumulate during choppy or sideways markets.
- Indicators may produce false signals during low-volatility periods or news events.
Case Study 1: AUD/USD M1 Buy
On the AUD/USD M1 chart, a green arrow appeared on the Magic Wave indicator, and the 4 MAs indicator showed green bars above 0.
A buy position was entered at 0.6750.
Stop loss was set at 0.6740 (-10 pips), and take profit at 0.6765 (+15 pips).
The trade reached the take profit target, resulting in a +15 pip gain.
Case Study 2: USD/CHF M5 Sell
On the USD/CHF M5 chart, a red arrow appeared on the Magic Wave indicator, and the 4 MAs indicator showed purple bars below 0.
A sell position was entered at 0.9225.
Stop loss was set at 0.9240 (+15 pips), and take profit at 0.9205 (-20 pips).
The trade reached the take profit level, resulting in a +20 pips profit.
Strategy Tips
- Use M1 and M5 charts for scalping to capture fast market moves.
- Focus on major pairs like AUD/USD, USD/CHF, and NZD/USD for better liquidity.
- Use a higher timeframe trend filter (H1 or H4) to trade in the direction of the main trend.
- Implement strict risk management, limiting trades to 1-2% of account balance.
- Consider using a trailing stop to secure profits as the price moves favorably.
