4 Moving Average Lines EA smlL_EURUSD

Please refer to the following website for more information on EAs.Forex Automated Trading Application Blog

The 4 moving averages EA smlL is a 5-minute EA that uses 4 exponential smooth moving averages (Type: Exponential Moving Average Exponenti Applicable Price: Close).

Each moving average is referred to as (i) a short-term moving average (ii) a medium-term moving average (iii) a long-term moving average (iv) a very long-term moving average. The trading logic of this EA is a simple yet qualified method of capturing entries at the points of advantage. 4 moving average indicators set on a 5-minute chart are shown in Figure 1. Figure 1 <Trading Rules> You can see the four moving average lines on the chart. The color of the lines is changed for each period of the moving average lines. Yellow: short-term moving average, blue: medium-term moving average, red: long-term moving average, purple: long-term moving average. The basic premise of the market is that prices do not just move in the direction of the trend, but always push back up. The market is formed by multiple waves of price pushback. In order to target these pushback points, this EA will enter the market at the three points of (i) the short-term moving average, (ii) the medium-term moving average, and (iii) the long-term moving average when the two conditions are met. The images at the time of sell entry and buy entry are shown in Figure 2 and Figure 3, respectively. <Sell Entry> Figure 2 <Buy Entry> Figure 3 [Entry Condition 1]: The moving average lines are aligned in the specified order. The order of the moving average lines is used as a control condition for this judgment. In case of a buy entry (uptrend): Short-term moving average (yellow) → medium-term moving average (blue) → long-term moving average (red) → very long-term moving average (purple) In case of a sell entry (downtrend): Very long-term moving average (purple) → long-term moving average (red) → medium-term moving average ( (blue)→short-term moving average (yellow) [Entry condition 2]: When the divergence between the 4 moving averages is more than a certain number of pips (i) When entering with the short-term moving average (i) The distance between the short-term moving average and the medium-term moving average is more than the specified number of pips (ii) When the distance between the medium-term moving average and the long-term moving average is more than the specified number of pips (iii) When entering with the long-term moving average (iv) When entering with the long-term moving average (ii) When entering with the short-term moving average (i) The distance between the short-term moving average and the medium-term moving average is at least the specified number of pips (ii) The distance between the medium-term moving average and the long-term moving average is at least the specified number of pips (iii) When entering with the long-term moving average (i) The distance between the medium-term moving average and the long-term moving average is at least the specified number of pips (iv) When entering with the long-term moving average (v) When entering with the short-term moving average (vi) When entering with the short-term moving average (ii) The distance between the medium-term moving average and the long-term moving average is more than the specified number of pips (iii) When entering at the long-term moving average (i) The distance between the medium-term moving average and the long-term moving average is more than the specified number of pips The following chart illustrates the case of a buy entry at (1) the short-term moving average line and (2) the intermediate-term moving average line. (1) When the buy entry is made at the short-term moving average Figure 5 Figure 5 shows that the buy entry is made at the red circle of the short-term moving average (yellow). After the buy entry profit is confirmed, the price touches the short-term moving average many times, but the entry is not made. This is because the entry control by Condition 3 is in effect. The entry control by the short-term moving average is released in the white circled area in the chart. The entry control is released when the short-term moving average crosses the intermediate-term moving average (short-term moving average < intermediate-term moving average). By applying this control, unnecessary entries can be eliminated, and only those areas where the market is likely to rebound can be captured and entered. (2) Entry at the mid-term moving average Figure 6 The entry control is released when the mid-term moving average crosses the long-term moving average (mid-term moving average < long-term moving average) in the white circle in the figure. In the case of a buy entry at the long-term moving average, the entry control is released when the short-term moving average crosses the long-term moving average (short-term moving average < long-term moving average). <Profit and Loss Fixing Conditions> [Profit Fixing Conditions] This EA implements a trailing stop function. The guideline for the start of trail after entry is 10 pips. When the price moves forward 10 pips after entry, the profit will be chased with an interval of 1 pips. If you do not leave a space between entries, you will often end up with a small profit, but you can pursue more profit by trailing with a 1-pip interval. [Loss Fixing Condition] Loss fixing conditions vary depending on the entry moving average line. The loss conditions for each moving average are shown in Table 1, using the buy entry as an example. Table 1 *Four pips above each moving average for a sell entry Now, let's take the short-term moving average as an example and illustrate with a figure. If the price falls after a buy entry at the short-term moving average (red circle) in Figure 7, the stop-loss line will be 4 pips below the medium-term moving average. The reason for not using the intermediate-term moving average as the stop-loss line is that there is a high possibility that the price will fall and rebound again at the intermediate-term moving average. Also, the stop-loss line is not a fixed position of the stop-loss line specified at the time of entry, but is programmed to automatically be 4 pips below the mid-term moving average in real-time, as shown in Figure 8. Figure 7 Figure 8 By automatically changing the stop-loss line, the stop-loss line can always be set at the correct position, and in some cases, it can withstand to the rebound point and eventually turn into profit. Figure 9 <Parameter Settings> This EA is designed so that users can freely change the parameter settings. The specific parameters that can be changed are listed below. (1) Magic Number, Allowable Spread, Allowable Slippage, and Number of Trading Lots The above four parameters can be freely changed. The number of lots can be changed for each moving average. (2) Trailing Start pips, Trailing Width pips For each of the three moving average lines, "Trailing Start pips" and "Trailing Width pips" can be set. The default settings are shown in Table 2. Table 2 [*This EA does not work properly in accounts with stop levels set because the trailing stop width is set to 1 pips. Please be aware of this if you are trading with a company other than those that can be operated.