The FRAMA Indicator applies an especially parameterized moving average for identifying accurate trend conditions in MT4. It also comprises a template including the 50 MA for plotting crossover signals.
This indicator firmly functions any timeframes of MetaTrader platforms. However, it works perfectly within M1 to H4 chart as a scalping tool. Also, we’ve found the FRAMA indicator a good match for all forex pairs, stocks, and crypto-assets.
This guide explains how to apply the FRAMA Indicator in MT4 for determining precise buy/sell signals.
FRAMA Indicator Overview
FRAMA generates less frequent signals than regular day trading indicators s but weighs more on accuracy standards. Eventually, one of its templates includes a 50-period simple moving average for filtering the trend signals by applying crossover methods.
FRAMA Indicator Explanation
The FRAMA uses a 10-period custom moving average for smoothing the price volatility and identifying the short-term trend status. However, using FRAMA alone may create frequent trading leads and cause unnecessary losses. For this reason, the developer of the indicator added a 50 MA alongside the main signal line for filtering the false signals.
When FRAMA is above 50 MA, we consider it a buy signal with a bullish trend confirmation. Conversely, following the bearish trend reversal, the opposite crossover will indicate a selling opportunity. Moreover, we’ll use the 50 MA level for determining the stop-loss zones.
Buy Signal Generation with FRAMA Indicator
- FRAMA is above the 50 MA
- The price breaks above the current FRAMA level
- Stop loss below the 50 EMA
- Exit long once the FRAMA drops below the 50 MA
Sell Signal Generation with FRAMA Indicator
- The FRAMA curve breaks below the 50 MA
- The price also drops below the current FRAMA level
- Set stop-loss above the 50 MA
- Exit short whenever the FRAMA line moves above the 50 EMA level