Profit Indicator

Profit Indicator

The Profit Indicator for MT4 uses the 9 and 45 SMA periods to spot good trading signals

One of the ways trend traders identify new trends forming is through the use of MACD or moving average crossovers. With moving average crossovers, two different moving averages cross over one another to confirm a change in trend. This moving average crossover is used by traders to enter and exit trade, and to ride the trend for long.

Different traders use different moving averages and different periods for different crossovers. The periods of the moving average used depends on whether the trader is a short or long-term trader. The use of moving average crossover is better simplified by using Profit Indicator.

The foundation
The Profit Indicator for MT4 is used to spot a good trading signal easily. Moreover, this indicator is used to exit the market at the right time. The indicator uses the fast Simple Moving Averages (9 SMA), and the slow Simple Moving Average (45 SMA) crossover to spot good trading signals as seen in the diagram below.

From the EUR/USD daily timeframe above, the indicator displays the yellow signal line, the zero level, and the main green (red) signal line.

The yellow line is the slow 45 Simple Moving Average (45 SMA). The red and green lines on the other hand are the fast 9 Simple Moving Average. When the 9-SMA line crosses above the zero level, the line changes color from red to green. On the other hand, when the 9-SMA line crosses below the zero level, the line changes from green to red.

The Profit Indicator can be used to identify the direction the price might be trending, signal for a potential entry point for a trend trade, as well as when a trend is reversing or ending. The profit indicator for MT4 works for all currency pairs and in all time frames. However, higher time-fames gives less false signals. Furthermore, this indicator can be used solely or as an additional confirmation for entries and exits.

The Profit Indicator is only suitable for trend trading. It is not advisable to use this indicator in a ranging market. This is because traders will often get whipsawed if this indicator is used in a sideways market.

How to use the Profit Indicator to trade
Traders can enter a buy-entry signal when the main signal line is green and crosses just above the yellow line of the indicator. Furthermore, a sell entry signal may be entered when the main signal line is red and crosses just below the yellow line of the indicator.

Conclusion
The Profit Indicator for MT4 uses the 9 and 45 SMA periods to spot good trading signals. This indicator is so simple to use and works for all the currency pairs. This indicator also works in all time frames. The profit indicator is only suitable for trend trading; hence, range traders should avoid using this indicator. Traders can adjust the moving average periods in the indicator settings to suit their trading condition. For best result, the Profit Indicator should be used along with price action and other indicators.