The Moving Average 3 Color indicator for mt4 (Metatrader 4) is a directional trend indicator that consists of a triple colored moving average.
The indicator can be used as a standalone trading tool for both trade entry and exit or as an additional trend filter that works together with an existing strategy or system of your preference.
It’s a beginner-friendly indicator.
Buy & Sell Trade Example
- Open a buy trade when the MA 3 color indicator starts drawing the green line.
- Open a sell trade when the MA 3 color indicator starts drawing the red line.
- Stick with the open trade when the indicator starts drawing the yellow line.
The indicator works equally well on all currency pairs (majors, minors and exotic) and shows promising results if used correctly.
The default moving average period can be easily modified.
Free Download
Download the “ma 3 color.mq4” indicator for MT4
Indicator Chart (EUR/USD M5)
The picture below shows the Moving Average 3 Color 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 Moving Average 3 Color 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.
Moving Average 3 Color & Lucky Reversal Indicator MT4 Day Trading Strategy
This MT4 day trading strategy combines the Moving Average 3 Color Indicator and the Lucky Reversal Indicator to identify high-probability intraday trades.
The Moving Average 3 Color Indicator shows trend direction: green line for bullish trend and red line for bearish trend.
The Lucky Reversal Indicator provides blue arrows for bullish reversal signals and red arrows for bearish reversal signals.
This strategy is designed for 15-minute and 30-minute charts and works well on major currency pairs like EUR/USD, GBP/USD, and AUD/USD.
Buy Entry Rules
- Ensure the Moving Average 3 Color line is green, confirming a bullish trend.
- Wait for a blue arrow from the Lucky Reversal Indicator, signaling a bullish reversal.
- Enter a buy trade immediately after the blue arrow appears in alignment with the green line.
- Place a stop loss below the most recent swing low.
- Set a take profit target of 20–35 pips or at the next significant resistance level.
- Close the trade immediately if the Lucky Reversal arrow turns red or the MA line turns red.
Sell Entry Rules
- Ensure the Moving Average 3 Color line is red, confirming a bearish trend.
- Wait for a red arrow from the Lucky Reversal Indicator, signaling a bearish reversal.
- Enter a sell trade immediately after the red arrow appears in alignment with the red line.
- Place a stop loss above the most recent swing high.
- Set a take profit target of 20–35 pips or at the next significant support level.
- Close the trade immediately if the Lucky Reversal arrow turns blue or the MA line turns green.
Advantages
- Combines trend direction with reversal signals for higher accuracy.
- Works well on 15-minute and 30-minute intraday charts.
- Visual arrows and colored trend lines make entries and exits clear.
- Captures significant intraday price movements efficiently.
- Suitable for major currency pairs like EUR/USD, GBP/USD, and AUD/USD.
Other Drawbacks
- Signals may lag slightly during sudden trend reversals due to the moving average calculation.
- Frequent signals in volatile markets can lead to overtrading if not disciplined.
- In flat or low-volatility markets, the strategy may generate false entries, reducing the win rate.
- May perform differently across currency pairs; optimization may be needed for exotic pairs.
Example Case Studies
Case Study 1: EUR/USD 15-Minute Chart
The Moving Average 3 Color line was green, indicating a bullish trend.
A blue arrow appeared on the Lucky Reversal Indicator, signaling a buy.
A buy trade was entered with a stop loss below the recent swing low and a take profit at 25 pips.
The trade reached the target, and the position was closed when the Lucky Reversal arrow turned red.
Case Study 2: GBP/USD 30-Minute Chart
The Moving Average 3 Color line was red, showing a bearish trend.
A red arrow appeared on the Lucky Reversal Indicator, signaling a sell.
A sell trade was entered with a stop loss above the recent swing high and a take profit at 30 pips.
The trade hit the target, and the position was closed when the MA line turned green.
Strategy Tips
- Use a small position size initially to test the strategy on your preferred currency pairs.
- Monitor key support and resistance levels to filter entries and improve risk/reward ratio.
- Consider using a trailing stop to lock in profits on longer intraday moves.
- Avoid trading during major news releases to reduce the risk of slippage and false signals.
- Focus on the most active trading sessions, such as London and New York, for tighter spreads and better execution.
