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The Power Fuse Edu is a trading algorithm based on a combination of standard forex indicators MACD and Bollinger Bands, the effectiveness of which has been proven by time. This indicator was created to determine the current trend and trade during this period. It is presented in the lower window of the price chart in the form of Bollinger lines Bands, with an added colored MACD line, which is made in the form of colored dots. These indicator values, that is, some of its factors, serve as the main ones in trading, that is, they determine the current trend and open certain trades, respectively.
Power Fuse Edu is suitable for trading any currency pairs, on any timeframes.
Input parameters
Power Fuse Edu's settings consist of only five input parameters, each of which directly affects its technical operation. The Colors section in its settings serves to change its color scheme, and the Levels section to add signal levels to its window.
- BandPeriod - the period of the Bollinger Bands indicator. The default value is 20.
- Fast - value of the period of the fast line of the MACD indicator. The default value is 12.
- Slow - period of the slow MACD line. The default value is 26.
- Smooth - period of the smoothed moving line of the MACD indicator. The default value is 5
- StDevNumber - current deviation of the indicator values from the standard ones. The default value is 1.0.
Indicator signals
The algorithm for using the Power Fuse Edu indicator is very simple. To open a certain position, the current trend is determined using the intersection of the MACD and Bollinger Bands lines. If the trend is upward, long positions are opened, if the trend is downward, short positions are opened. Trades opened using the indicator are closed according to the same principle, at the moment of the current trend change.
Signal for Buy trades:
- The MACD line, like the middle line of the Bollinger Bands, has a color with a growth value. It moves up, crossing the upper border of the Bollinger Bands.
Upon receipt of such conditions, a long position may be opened on a signal bullish candle, due to the presence of an uptrend in the market. Such a position should be closed after a change in the current trend, namely after a reverse intersection of the lines or when the MACD color changes. At this moment, one should consider opening new trades.
Signal for Sell trades:
- The MACD line moves from top to bottom, crossing the lower line of the Bollinger Bands. Both lines, MACD and the middle Bollinger Bands are colored with a falling value.
A sell trade can be opened immediately upon receipt of such conditions on a bearish signal candle. Such a trade should be closed upon receipt of the opposite conditions from the indicator, namely at the next intersection of the lines or when their color changes. At this moment, a change in the current downtrend is expected, which will allow considering the opening new trades.
Conclusion
Power Fuse Edu is an excellent trading algorithm based on accurate and effective time-tested indicators. But despite this, the indicator can often give false and not entirely accurate signals, which can be prevented by using additional filters, advisers or indicators. And to improve own trading skills, preliminary practice on a demo account is recommended.
You may also be interested The True Range Momentum Trend trading indicator for MT4
