It’s a rare case that you can find an indicator that would be functional and at the same time demonstrate a high level of efficiency. Normally, indicators work in a particular market phase. Traders have to either wait for a signal from one indicator or use several different technical tools. But traders' community makes headway, and the result of the so called technical “progress” is a new indicator dubbed Madridgoldenfilter. Madridgoldenfilter is an indicator of an absolutely new type, created on the principles of such well-known indicators as RSI, Moving Averages, ADX, MACD, as well as the properties of indicators like Force Index, Demark and Momentum.

As you have understood, the Madridgoldenfilter indicator bears no resemblance to the usual trading tools and is therefore subject to scrutiny. Despite the complex composition and structure of the indicator, it is not difficult to deal with its signals and operating principle. The Madridgoldenfilter indicator, like all others, is located at the bottom of the screen and is displayed below the price chart. The developers of the indicator added a feature of signal arrows showing up at open positions, for its easy perception and rapid application. This indicator became the basis of the Black Diamond Forex System strategy, and we will review its effect on the example of this strategy.

We have noted that the Madridgoldenfilter is not a standard indicator, so the Black Diamond Forex System strategy, unlike many others, has 3 strategies in its arsenal:

1. Broken trend 
2. Golden trend
3. Golden Cross

Let’s start to review the strategies and indicator’s signals from the beginning. The first strategy is a “Broken trend”. Following this strategy pays off well and is quite profitable. This strategy will help us to determine the reversal points and the possible formation of new trends. Let’s consider the signals to open orders to buy. The first condition is the presence of a downtrend, then you must follow the moving averages (EMA, period 9 and 30), waiting for the fast EMA9 crossing the slow EMA30 upwards. The indicator value is an additional filter – it must be more than 100. The orders to sell are opened at opposite factors, i.e. when the market sees an uptrend, the EMA9 crosses the EMA30 downwards, and the indicator value is below 100.

The next strategy is a “Golden trend”. The trader’s actions depend on the current trend and the Demarker indicator’s values. So, if the market sees an uptrend, the Demarker indicator is below 0.5, the index is below 0, and the EMA5 crosses SMA15 downwards, then we send the order to sell. We will buy if there is a downward trend, the Demarker’s level is above 0.5, the index value is greater than 0, and the EMA5 crosses SMA upwards.

The last strategy, which allows us to use the Madridgoldenfilter indicator, is a “Golden cross”. It is the simplest one, as you only need two conditions to be met to open a deal. The main call to action is the EMA5 crossing the slow EMA15. If fast MA crosses the slow one upwards, you can buy, but don’t forget to monitor the RSI value, which should be above 50. If the fast moving with a period of 5 crosses a slow one with a period of 15 downwards, you should sell, with the RSI being lower than 50.

As you can see, the Madridgoldenfilter indicator can be used in different situations, and its use significantly increases the trading activity. The only task of the trader is to follow all the rules of the indicator in the Black Diamond Forex System strategy.