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Forex trading strategy of MACD with Alligator indicator - Forex Function

Forex trading strategy of MACD with Alligator indicator

Last Update: 15 May,2015
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MACD is a popular default indicator used for different strategy. We will use MACD and Alligator indicator in this strategy. We will get buy/sell signal in the trend direction. These two indicators will help to find trend direction and we will find our trade set-up. This strategy will be profitable as we will take entry in the trend direction. New comers can also find signal from this strategy.


Required indicators:

(1) MACD (Default setting). click here to know, how to set MACD

(2) Alligator Indicator (Default setting). click here to know, how to set Alligator indicator


How to get buy signal

We will search for buy entry in the uptrend market. When market price cross above alligator indicator then we need to get confirmation from MACD. When MACD appears above 0.0 level, then we will get buy signal. Look at the chart example below in the picture. There are two buy setup given in the picture. Hope you will understand how to find buy signal from this strategy.


macd-alligator-trading-strategy


How to get Sell signal

We will search for sell entry in the downtrend market. When market price crosses below alligator indicator, then we need to get confirmation from MACD. When MACD appears below 0.0 level, then we will get sell signal. Look at the chart for example below in the picture. Here you will find three sell setup according to this strategy.


forex-trading-strategy-of-macd


When you need to avoid

This strategy is not for ranging market. So you need to avoid during ranging market. Look at below picture to know, how to find ranging of the market price. You can see at MACD, there is not enough momentum on it. So it is indicating ranging. Alligator is also on ranging mode. So during this situation, we should not take any entry.


when-to-avoid


Time frame: H4 is preferable. You can use on lower time frame for scalping


Currency pairs: All pairs.


Take profit and Stop loss:Take profit should be 50-100 pips. When any signal hits 50 pips, then you need to move your stop loss at entry point and wait for final take profit.

Stop loss should be placed above swing high for sell signal and below swing low for buy signal.


Risk warning: You have to be careful during ranging market. You should not find entry during ranging and news time. You must follow money management theory for following this strategy. You need to make practice this strategy on demo account before using on real account.


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