The RSI MA is a momentum reversal indicator that works for MT4 platforms. This indicator applies the Relative Strength Index over Exponential Moving Averages for picking out the trend reversal trade setups.
The momentum determines the underlying bullish or bearish force behind the price. That is why trend-following traders always find it useful to test the market insight by using a momentum indicator.
The RSI MA Indicator shows you the correct momentum signals in a very simple manner so that you can easily pick the right trading direction.
However, this indicator doesn’t outline the trade-entry levels. So, you may need to scan yourself for finding price-reversal patterns. We can consider activating an order when the candlestick pattern and the RSI MA show the same direction as the price.
Also Read: Top 10 Free MT4 Forex Indicators
This indicator compares its underlying 14-period RSI value with the moving average. When the EMA turns greater than the relative strength index, the indicator line jumps upwards from the 20-level and moves above 80 indicating the trend as bullish.
When the momentum turns bearish the EMA moves lower than the RSI value. In such a condition, the RSI MA level will drop below the 80-level and enter the 0-20 zone. We consider such movements as bearish trend-reversal signals.
The indicator value remaining in between 20 and 80 levels suggests the market is going through a consolidation period.
RSI MA Indicator for MT4: Buy Conditions
- The RSI MA level climbs above the 80-level
- Open buy when price makes a bullish breakout after plotting a bullish reversal signal
- Take profit whenever the RSI MA drops below 20
RSI MA Indicator for MT4: Sell Conditions
- The price plots a bearish breakout pattern at the top of the chart
- Open sell order after the RSI MA hits below 20
- Exit sell order whenever the indicator level jumps above 80