A trend-following strategy combining BB MACD and Trend Magic (TM) indicators to generate entry signals and dynamic stop-loss levels. Originally developed for EURUSD, it uses multi-timeframe logic and non-repainting indicators for scalping on M1–M5 and swing trading on Daily charts.
Background
The Trend Magic System began as a dual-indicator approach: BB MACD assessed trend direction (bullish or bearish), while Trend Magic triggered entries and managed stop-losses. Later, both were merged into a single custom indicator — HA_0001a — which plots a green bar when both indicators confirm a buy signal, and a red bar on a sell signal.
An enhanced multi-timeframe version, HA_0001a_MTF, followed — robust and non-repainting — but proved challenging for many traders to interpret.
Markets: Forex
Currency Pair: EURUSD
Timeframes: Multiple — recommended: M1, M5, and Daily
Indicators: Clock_v1_3, Ant-GUBreakout_V.0.4.1, Trend Magic, BB MACD, StDv 1.1
Strategy Type: Scalping & trend-following
Risk Management: StopLoss and TrailingStop
Strategy Setup & Original Indicator Settings
We use EURUSD due to its strong trending behavior and consistently tight spread.
Non-standard indicator settings:
- Clock_v1_3 — displays local time, broker time, and current candle’s time (for session awareness).
- Ant-GUBreakout_V.0.4.1 — placed so its colored box covers the Asian session in your timezone.
- Trend Magic — CCI period = 50, ATR period = 5.
- BB MACD (for M5 chart): Fast EMA = 144, Slow EMA = 233, Signal = 21.
- StDv 1.1 — standard deviation oscillator (used for volatility context).
Trading Rules
Long Entry:
Open a buy position when both conditions are met:
- BB MACD histogram is blue;
- Trend Magic line changes from red to blue.
Short Entry:
Open a sell position when both conditions are met:
- BB MACD histogram is red;
- Trend Magic line changes from blue to red.
Exit & Stop-Loss Management:
Use StopLoss and TrailingStop. See illustration below:
A — Long entry signal.
B — Initial StopLoss placed 1 pip above the most recent swing high (a strong technical level).
From point A, TM slopes downward, enters consolidation, then resumes downward slope. Once confirmed (i.e., no further movement after candle C closes), move StopLoss to the horizontal TM line at point D. From point C, TM moves sideways then down again; once confirmed at candle E close, shift StopLoss to the TM horizontal line at point F. In short: trail the stop just above each confirmed horizontal TM level. Position likely closes at point G.
Live Example
Short Entry:
BB MACD is red and TM flips from blue to red — open short on that same bar.
Long Entry:
BB MACD is blue and TM flips from red to blue — open long on that same bar.
Additional Rule for M1 Chart:
For long entries, the signal bar must close above the TM line.
For short entries, the signal bar must close below the TM line.
Download Trend Magic System indicators
FAQ
What is the Trend Magic System?
A non-repainting trend-following strategy combining BB MACD for trend bias and Trend Magic for entries and trailing stop placement — optimized for EURUSD.
Which timeframes work best with this strategy?
M1 and M5 for scalping; Daily for swing trades. The system includes multi-timeframe logic but performs most reliably on these three.
How does the trailing stop work in Trend Magic System?
It follows horizontal levels of the Trend Magic line — moved up/down only after confirmation (candle close), always placed 1 pip beyond the latest confirmed TM level.
