MACD (moving average convergence/divergence) Indicator for MT4

Moving Average Convergence Divergence (MACD) Indicator for MT4 was designed by Gerald Appel in the late 1970s. MACD is designed to analyse trends direction, moves and mainly its time and strength.

MACD (moving average convergence/divergence) Indicator for MT4:

MACD is also a member oscillator family use histogram to show different signals and based on two bars and lines. MACD work predetermined numerical data setting (9, 12, 26) MACD work on bar graph. As we come to MACD interface there are two lines MACD blue line and red dotted signal line.

Characteristics of MACD Indicator:

  • Chart: Candlestick, Renko
  • Indicators: two moving averages.
  • How MACD indicator for MT4 works:
  • Time frame: any
  • Platform: MT4 and MT5
  • Currency pair: any
  • Time sires: three

Formula used for MACD is as: MACD={12-Period EMA }-{ 26-Period EMA}

Where: 12 EMA is short period and 26 EMA is longer period. The distance between short period and long period represent  difference of MACD from zero line. If they are close MACD and signal line areclose if they are on distance goes invercly.

Signals of MACD indicator for MT4:

  1. Sell: downward trend indicate potential seller strength on trend as the trend low the lower trend become week.
  2. Buy: upward trend indicates potential buyers’ strength on trend as the trend go high the higher trend become weak.
  3. Crossover: a trend is changing its direction.
  4. Above zero line: when the MACD is above signal line, market is bullish
  5. Over zero line: confirmation of a strength of a current trend.
  6. Cross below zero: when the MACD is below signals line, market is bearish.
  7. Over bought and over sold: when market move very quickly up and down it is over bought and sold signals.

Limitations of MACD Indicator for MT4:

MACD interface is confusing for new traders need to understand and learn. Best setting for MACD is 9, 12, and 26 Some traders lower the setting of MACD to get faster signals but, faster signals probably be the false ones. Sometimes MACD provide reversal signals but in actual they are not reversal signals. MACD is used only for trend confirmation other aspects are also necessary at this point other indicators are needed. MACD another lack is timing difference between MACD and signals line so in my opinion it requires a lot of practice and experience.

Merits if MACD Indicator for MT4:

MACD is the simplest and very reliable indicators used by many Forex traders and MACD work on relating two EMAs make it effective for every market. MACD is one of the important ingredients in many profitable trading strategies, MACD work on finding two moving averages. Combined RSI and MACD indicators can be best to find overbought and oversold levels.

Conclusion:

MACD is best and most efficient indicator but not a robotic indicator so it depends on user the way he uses it there is not a right or wrong way to use it. Its performance depends on the strategy you form with this indicator and the indicators you combine in it, your understanding about signals.

6 Replies to “MACD (moving average convergence/divergence) Indicator for MT4”

  1. I think this is one of the most vital information for me.
    And i’m glad reading your article. But wanna remark on some general things,
    The site style is wonderful, the articles is really excellent :
    D. Good job, cheers

  2. You need to take part in a contest for one of the highest quality websites online.
    I most certainly will recommend this website!

  3. I am sure this paragraph has touched all the internet people, its really really nice piece of writing on building up
    new weblog.

  4. Hi there! I know this is kinda off topic but I was wondering if
    you knew where I could find a captcha plugin for my comment form?
    I’m using the same blog platform as yours and I’m having problems finding one?

    Thanks a lot!

    Review my web site :: vpn special code

Leave a Reply

Your email address will not be published. Required fields are marked *