Nduet Semaphore Trend Momentum Indicator
MT5 Momentum TradingFree DownloadThe Nduet Semaphore Trend Momentum Indicator for MT5 is actually a combination of two Moving Averages and the Semaphore gauge. The goal of the moving averages is to determine the trend’s direction and the Semaphore alert indicator serves as identificator of the momentum. Let’s check if this combo is really useful.
Trading with the trend as main principle
It’s a common knowledge that the best approach is to trade with the trend. There is even a saying trend is your friend. But the problem is how to recognize it properly? The Nduet Semaphore was developed with the idea to solve this matter.
Signals provided by this tool are based on crossover of blue and red lines. Each has its own role to play, namely the red one reflects price momentum, while blue one acts a dynamic support/resistance level.
This is rather simple strategy and rules that apply can be summarized into:
- For a long play – red MA should cross above blue MA and afterwards wait for a price pullback. Confirm your entry with price action patterns.
- For a short play – conversely, red MA should cross below blue MA. When a pullback happens, verify entry with patterns as already mentioned.
When it comes to profit taking, it can be when opposite signal occurs or specifc risk-to-reward ratio (e.g. 1:2) can be utilized. For a stop loss it can be a few pips distance away from the blue line.
Summary
It may seem like a pretty simple trading approach at the first glance, actually it may turn to be effective and profitable when properly applied. The key here is to make use of the price pullback and trend-continuation.
It will work the best in times of large market swings and strong trend and perform a bit worse in sideways market.
