Two SMA Cross Indicator
Platform: MT5 Type: Trend Last update: September 21, 2024The Two SMA Cross Indicator for MT5 is, as the name suggests, a combination of two simple moving averages. They work together to generate clean buy and sell signals directly on trading chart along with colorful visual references.
It can be effectively utilized in many ways, but mainly as trade entries and exit points provider as well as reliable trend confirmator.
Anatomy and signals of the indicator
The approach that is represented by this gauge is based on the crossover strategy. This is a great fit especially for less experienced forex traders as the signals generated are pretty easy to interpret and understand. Just take a look at the example chart below.
The calculations behind this tool include the readings from the ATR adaptive SMA. This adaptive feature results in enhanced and even cleaner trade suggestions.
As you can see, it just looks like a pure crossover system as it’s based on the lines intersections. The best part is that one of these lines dynamically adjusts its color to align precisely with the prevailing trend.
Basically, we can interprete the suggestions as follows:
- Open a long trade when the green signal line appears.
- Open a short trade when the pink signal line occurs.
The above insights are just basic inputs. To improve the sucess rate, the technical analysis should be supported with more data and wider perspective. For example, it would be wise to consider important market levels (e.g. defined by supply and demand zones).
