The 3 SMA Pip Machine is a moving average crossover-based MT4 trading strategy dedicated to beginners in online trading. It combines three simple moving averages with unique parameters for generating accurate trend-following trading signals.
The 30 and 50-day moving averages determine short-term market trends plotting crossover signals. On the other hand, the 100 MA indicates the long-term market bias that also tells you whether you should look for a buy or sell signal.
For instance, a price exceeding 100 MA indicates a buy time. In such a condition, you’ll need to wait until the 30 MA moves above the 50 EMA and plot a bullish crossover signaling a buy confirmation.
Technically, all the moving averages of the indicator work as dynamic support/resistance levels. If you’re scalping or day trading, the 30 and 50 MA can be ideal options for stopping the loss. The 100 MA is the best level to set an SL for intraday and long-term entries.
The price closing above all the EMA’s is an initial confirmation for a buy entry. However, it is essential to wait until the indicator plots the dynamic resistance levels that ensure a stable uptrend market.
We’ve decided to go long in the above example because of the bullish crossovers between 30. 50 and 100 MAs. The price rejecting the 30 MA and rejoining the bullish momentum can be a perfect moment to enter long.
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Sell Signal Generation with 3 SMA Pip Machine
In the above chart, initially, the price failed to exceed 100 MA and plotted a bearish reversal following the false break. Later, the 30 and 50 MA moved below the 100 MA, forming a bearish crossover. Later, the price was rejected near the dynamic resistance for the second time, confirming a selling opportunity following the bearish trend reversal.