The SMMA Crossover Signal Indicator is a moving average-based trend-reversal indicator. This indicator doesn’t plot the MAs at the main chart window. Instead, it monitors the moving average movements in the background and shows trend reversal signals whenever it identifies a crossover between the MAs.
This indicator applies short moving averages and works best as a scalping tool. Newbie traders who love day trading in live markets may find this indicator as an ideal trend trading tool.
SMMA Crossover Signal Indicator Overview
This indicator applies to simple moving averages in the background for plotting crossover signals. Whenever a crossover happens, it plots arrow signals pointing to the possible upcoming trend directions.
After an arrow signal appears, traders need to assess the timing and level of the entry following the signal direction. An opposite arrow signal to your trade entry can be converted to a trade-exit signal as well.
SMMA Crossover Signal Indicator Explained
For crossovers, we need to apply at least two moving averages with different parameters. One of these moving averages has to be fast and the other one needs to be slow for plotting the crossover signal.
The SMMA Crossover Signal Indicator applies 9 and 18-period simple moving averages for generating the trend-reversal signals. The indicator plots a green arrow when the 9 SMMA moves above the 18 SMMA plotting a bullish crossover.
On the other hand, the 18 SMMA turns greater than the 9 SMMA represents a bearish crossover. In such a case, the indicator will plot a red arrow that signals for an upcoming bearish trend.
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SMMA Crossover Signal Indicator: Buy Conditions
- A green arrow appears below the candlesticks
- The price breaks above its current range movement
- SL below the nearest swing low
- Take profit whenever the indicator plots a red arrow at the top of the chart
SMMA Crossover Signal Indicator: Sell Conditions
- The indicator plots a red arrow above the price candles
- The price breaks below its current movement range
- SL above the current swing high
- Take profit whenever a red arrow is plotted at the bottom of the chart