The indicator displays the position opening points on the chart in the form of arrows for the following trading system.
Three exponential moving averages (EMA) are used):
- Fast (red) with the MAPeriod averaging parameter;
- Average (green) with the averaging parameter equal to MAPeriod * 2;
- Slow (black) with the averaging parameter equal to MAPeriod * 4.
The presence of a trend is determined by the location of the averages relative to each other. If the fast is above the average, and the average is above the slow, then the trend is bullish, If the fast is below the average, and the average is below the slow, then the trend is bearish, otherwise it is flat. Trades are opened in the direction of the trend at the time of completion of the rollback, which is determined by the change in the direction of the fast average.
Condition for opening a long position:
- Fast EMA above average;
- The average EMA is above the slow one;
- Fast EMA one bar back pointing up;
- The fast EMA two bars back is directed downwards.
Condition for opening a short position:
- Fast EMA below average;
- The average EMA is lower than the slow one;
- Fast EMA one bar back pointing down;
- The fast EMA two bars back is pointing up.
[spoiler title=”Read More…”]
Condition for closing a long position: the fast EMA crosses the middle one from top to bottom.
Condition for closing a short position: the fast EMA crosses the middle one from the bottom up.
The indicator uses one parameter-Period for fast ema.