INDICATOR BBMA OA – Oma Ally is a Malaysian trader who is the founder of the BBMA system. He is also known as a successful mentor educating forex traders to be able to produce a consistent profit. According to the author, Oma Ally is a teacher Trader who is a generous share of his knowledge to the wider community. Let’s look at the indicators, trading rules (he calls it “BASIC BBMA”), how to entry and trading tips using the system he created.
Definition Of indicator BBMA OA
BBMA stands for merging of 2 indicators contained in MT4 namely Bolinger Band (BB) and Moving Average (MA).
Bollinger Band (BB) is an indicator of technical analysis used to measure volatility and to read the movements of a market. BB consists of 3 lines known as “TOP BB, MID BB & LOW BB”. In this technique, BB is used as Support and Resistance.
Moving Average (MA) is an indicator that displays the average value of a price data over a given period of time so we are simplified to recognize the trend or direction of price movement in general. In this technique, MA is used to look for indications of changes in price trends, while also finding entry opportunities and for opportunities out of the transaction.
Setting indicator BBMA OA
Attach the following indicators to your chat screen:
- Bolinger Bands Period 20, Deviation 2
- Moving Average Period 5, MA method: Linear Weighted, Apply to High
- Moving Average Period 5, MA method: Linear Weighted, Apply to Low
- Moving Average Period 10, MA method: Linear Weighted, Apply to High
- Moving Average Period 10, MA method: Linear Weighted, Apply to Low
- Moving Average Period 50, MA method: Exponential, Apply to Close
- If you feel confused installing the above indicator, to make it easier I have prepared the indicator template in the last section.
- Here’s an example of a ready-to-use BBMA chart:
The Basic Laws Of The indicator BBMA OA
There are 3 rules, Oma Ally called it “Basic Law ”
MA 5/10 High should not be out of the Top BB and MA 5/10 Low should not be out of Low BB. MA YG out of BB signifies the trend will be exhausted or will change direction.
Candlesticks should not be close on Top of BB or Low BB.
The Candlestick is close to the Top of the BB when a vertical BB indicates the market has MOMENTUM to rise.
The Candlestick is close outside of Low BB when BB decreases, indicating that the market has MOMENTUM to go down.
The Candlestick is close outside of Top BB or Low BB when the BB is flat indicating the market will change direction.
- The Candlestick closes outside the BB Top when the BB is flat means the price will drop.
- The Candlestick is close outside the BB Low when the BB is flat means the price will rise.
- Flat BB indicates absence of Volume or sideways market
The conditions for Buy or Sell transactions are as follows:
- Only Buy at the moment the price is around MA 5/10 Low, and
- Only Sell at the moment the price is around MA 5/10 High.
Setup Entry indicator BBMA OA
This technique has 3 types of Setup for Entry:
- Market lost Volume (MHV)
FIRST SETUP ( EXTREME )
- Definition: MA is out of Top BB/Low BB and closes Candlestick outside Top BB/Low BB.
- Normally Candlestick & MA is in the BB range and should not be outside the BB. If Candlestick & MA successfully came out penetrated the top BB/Low BB, then it has violated the BASIC law and it is forming an EXTREME setup.
- Extreme SELL: Moving Averages 5/10 High out of Top BB
- Extreme BUY: Moving Averages 5/10 Low out of Low BB
SECOND SETUP (Market Lost Volume (MHV))
- MHV is formed at the end of the trend after something increases or decreases. Informing that the increasing momentum (BUY) or decline (SELL) has begun to weaken or does not have the power to continue the trend.
- MHV is also known by traders in general with the nickname Double Top & Double Bottom.
- MHV is formed after the formation of Extreme Buy/Sell setups.
- MHV valid if: The price did not succeed Close outside of Top BB/Low BB, and just leave the Shadow Candle outside of Top BB/Low BB.
- MHV invalid/Void if: The price successfully penetrated and Close the Top BB/Low BB.
EXAMPLE MHV INVALID/CANCEL:
THIRD SETUP ( Re-Entry )
- If there is a significant decline or price increase, usually will be followed by the formation of sideway/ranging pattern, then this is the form of Re-Entry setup.
- Re-Entry Sell setups are generally priced at MA5/10 High when the price is down and is forming sideway. However, the best Re-Entry setup for Sell is when the price is looking for the MA5/10 High and there is a near Mid BB/MA5/10 High.
- The Re-Entry Buy Setup is generally the price for MA5/10 Low When the price is up and it is forming sideway. However, the best Re-Entry Setup to Buy is when the price is looking for the MA5/10 Low and there is a close Mid-BB/MA5/10 Low.
- Note the MA 50 indicator. If the price is below the MA 50, it is recommended to focus on finding a sell re-entry setup (not re-entry Buy) because the price trend is falling, and vice versa.
TRADING TIPS USING indicator BBMA OA
- For chart analysis in MT4, use a larger Time Frame (TF), TF H4 is recommended upwards.
- Do not open positions based on the analysis of 1 TF only (single TF). Analyze the movement using multi TF (H4, D1, W1, even MN if necessary). From the combined multi TF, we can predict where the price will move.
- Note the MA 50 indicator. If the price is below the MA 50, we recommend focusing on looking for a SELL setup. Similarly, if the price is above the MA 50, focus on finding the BUY setup. It’s safer.
- It is advisable to try this technique first on a demo account at least 1 month in order for you to get used to it. Good luck.
To make it easier I have prepared the indicator template. Please download here.
Source: Basic Guide ebook technique BBMA by OMA ally