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The BB OsMA is a trading algorithm based on the functioning of two forex indicators, namely Bollinger Bands and a modified version of the OsMA moving average. Due to the combination of effective indicators, BB OsMA is a very accurate trading assistant, thanks to which it can be determined the current trend and opened a position in its direction. The indicator itself is presented in the lower window of the price chart as a channel consisting of non-intersecting moving averages and one line, which consists of circles of two colors, which are limited by the channel lines. A trade is opened taking into account the conditions and values of the indicator, so it should be carefully considered the signals received from it.
The BB OsMA indicator can be used for trading on any convenient timeframe, with any currency pairs.
Input parameters
The BB OsMA indicator has 4 input parameters in the settings, the change of which also affects the performance of technical work, that is, the performance of calculations, therefore, before changing a certain parameter, it should be considered its further work. The indicator settings also have a Colors section, which is responsible for the color gamut and the thickness of the indicator values, as well as Levels - responsible for adding signal levels to its window.
- Fast EMA - fast exponential moving average period. Default value is 26.
- Slow EMA - the value of the period of the slow moving average. The default value is 130.
- Signal SMA - period of the simple moving average, signal line of the indicator. The default value is 13.
- Standard Deviation - the period of standard deviation of the indicator values from the average. The default value is 2.0.
Indicator signals
The main signal of the BB OsMA indicator for opening a certain position is the formation of several moving balls of the same color between the channel lines. That is, the position is opened on the candle on which the next ball formed with the values of the previous one. However, in addition to this condition, one should also take into account the location the indicator relative to the level 0 and the line of balls relative to the boundaries of the moving averages channel. And only on a candle, on which a certain combination of these conditions matches, a trade can be opened in the direction of the current trend.
Signal for Buy trades:
- At least three indicator balls are colored with a growth value. The line consisting of these balls is above level 0, but does not touch either the upper or lower border of the channel.
After such conditions are obtained on a certain candle, a long position can be opened. Such a position should be closed after at least one ball with the opposite value, that is, of a different color, appears in the indicator window. At this moment, it can be prepared to open a new trades, if the desired combination of conditions is obtained on a certain candle.
Signal for Sell trades:
- The indicator is below level 0. At least three of its balls have a color with a falling value, and the line of these balls does not violate the boundaries of the moving average channel.
After the formation of the next ball with a fall value, a sell trade can be opened. Such a trade should be closed immediately after the formation of a ball with a different color. This will indicate a possible change in trend and at this moment it can be prepared to open new trades, after the rest coincide terms.
Conclusion
The BB OsMA indicator may seem difficult to use at first glance, however, practice on a demo account proves otherwise. In addition to being easy to use, the indicator is also effective, which allows making any trades with good profits. To ensure the accuracy of the signals and get the maximum profit from the trade it is recommended to use the indicator with additional advisers, indicators and other tools.
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