Four Simple Moving Averages

The Four Simple Moving Averages indicator plots up to four distinct SMA lines on a single chart to help traders identify trend direction and potential support or resistance levels without exceeding indicator limits.

Usage

The indicator is used to monitor multiple time-weighted average prices simultaneously to determine market momentum across various timeframes. By plotting four separate SMAs, users can observe how short-term price action interacts with long-term trends. For example, a common configuration involves setting the lengths to 21, 55, 100, and 200 to visualize the progression from short-term momentum to long-term institutional trend lines.

Trend and Crossover Analysis

Traders can use the relationship between the lines to identify trend strength. When the shorter-term SMAs are positioned above the longer-term SMAs, it typically indicates a bullish environment. The script includes built-in alert logic for:

• Price crossing the first SMA (MA 1).
• The first SMA crossing the second SMA (MA 1 vs MA 2).

These alerts help in identifying potential entry or exit points based on moving average crossovers.

Details

The script calculates Simple Moving Averages by taking the arithmetic mean of a selected price source over a specific number of periods. Unlike exponential moving averages, SMAs give equal weight to every data point in the lookback period, making them effective for identifying major structural support and resistance levels.

The implementation allows for independent "Source" inputs for each of the four averages, meaning a trader could compare an SMA based on "High" prices against one based on "Low" prices to create a custom channel. The toggle settings for the second, third, and fourth averages ensure that users can declutter their workspace by only displaying the lines relevant to their current strategy.

Settings

• Enable 2nd/3rd/4th MA: Boolean toggles that allow users to show or hide the secondary moving average lines on the chart.
• Length 1-4: Numerical inputs that define the lookback period (number of bars) for each specific SMA calculation.
• Source 1-4: Dropdown menus to select the price data used for each calculation (e.g., Close, Open, High, Low, HL2, etc.).

FAQ

Can I use this indicator for crossover strategies? Yes, the script is designed to highlight the relationship between different moving averages and includes specific alert triggers for crossovers between MA 1 and MA 2.

Does this indicator support different price sources? Yes, each of the four moving averages can be assigned a different source, such as the close, open, or high price, providing flexibility for various technical analysis techniques.

How do I access the Four Simple Moving Averages indicator? You can get access on the LuxAlgo Library for charting platforms like TradingView, MetaTrader (MT4/MT5), and NinjaTrader for free.