Trading with MACD indicator includes the following signals:
MACD lines crossover — a trend is changing
MACD historam staying above zero line — market is bullish, below — bearish.
MACD histogram flipping over zero line — confirmation of a strength of a current trend.
MACD histogram diverges from price on the chart — signal of an upcoming reversal.
MACD is the simplest and very reliable indicators used by many Forex traders.
MACD (Moving Average Convergence/Divergence) has in its base Moving Averages.
It calculates and displays the difference between the two moving averages at any time. As the market moves, moving averages move with it, widening (diverging) when the market is trending and moving closer (converging) when the market is slowing down and possibility of a trend change arise.
Basics behind MACD indicator
Standard indicator settings for MACD (12, 26, 9) are used in many trading systems, and these are the setting that MACD developer Gerald Appel has found to be the most suitable for both faster and slower moving markets. In order to get a more responsive and faster performance from MACD one can can experiment with lowering MACD settings to, for example, MACD (6, 12, 5), MACD (7, 10, 5), MACD (5, 13, 8) etc.
These custom MACD settings will make indicator signal faster, however, the rate of false signals is going to increase.
MACD indicator is based on Moving Averages in their simplest form. MACD measures the difference between faster and slower moving average: 12 EMA and 26 EMA (standard).
MACD line is created when longer Moving Average is subtracted from shorter Moving Average. As a result a momentum oscillator is created that oscillates above and below zero and has no lower or upper limits. MACD also has a Trigger line. Combined in a simple lines crossover strategy, MACD line and trigger line crossover outperforms EMAs crossover.
Besides being early on crossovers MACD also is able to display where the chart EMAs have crossed: when MACD (12, 26, 9) flips over its zero line, if indicates that 12 EMA and 26 EMA on the chart have crossed.
How does MACD indicator work
If to take 26 EMA and imagine that it is a flat line, then the distance between this line and 12 EMA would represent the distance from MACD line to indicator's zero line.
The further MACD line goes from zero line, the wider is the gap between 12EMA and 26 EMA on the chart. The closer MACD moves to zero line, the closer are 12 and 26 EMA.
MACD histogram measures the distance between MACD line and MACD trigger line.
MACD indicator Formula
MACD = EMA(Close)period1 - EMA(Close)period2
Signal Line = EMA(MACD)period3
period1 = standard settings are 12 bars
period2 = standard 26 bars
perid3 = standard 9 bars
The following are the steps to calculate MACD
1. Calculate the 12-days EMA of closing price
2. Calculate the 26-days EMA of closing price
3. MACD = 12-days EMA - 26-days EMA
4. Signal Line = 9-days EMA of MACD
Formula for EMA
EMA = (SC X (CP - PE)) + PE
SC = Smoothing Constant (Number of days)
CP = Current Price
PE = Previous EMA
Trading MACD Divergence
MACD indicator is famous for its MACD Divergence trading method.
Divergence is found by comparing price shifts on the chart and MACD values.
MACD Divergence phenomenon occur as a result of shifting forces on the Forex market. For example, while Sellers may seem to be dominating the market at the moment and price continues to trend down, there already might be signals for an overall weakening of Sellers power. This key warning moments can be observed with MACD indicator. What Forex traders would see is that despite price making new Lower Lows, MACD doesn't confirm that and instead registers a Higher Low, signaling that Sellers are running out of steam and a trend change is on its way.
Opposite will be true for Buyers.
How to trade MACD Divergence
When MACD line (on our screenshot it is a blue line) crosses Signal line (red dotted line) - we have a point (top or bottom) to evaluate. With two most recent MACD line tops or bottoms find corresponding tops/bottoms on the price chart. Connect MACD tops/bottoms and chart tops/bottoms.
Evaluate the lines received, as shown on the larger screenshot (click on the small picture to enlarge).
With MACD divergence spotted Enter the market when MACD line crosses over its zero point. Another entry strategy is to find 2 most recent swings high or low on the chart and draw a trend line trough them; and then set an Entry order on the breakout of that trend line.
MACD divergence trading method used not only to predict trend turning points, but also for trend confirmation. A current trend has high potentials to continue unchanged in case no divergence between MACD and price was established after most recent tops/bottoms evaluation.
Are you looking for a bar or candlestick timer for MetaTrader 4? An indicator to count down the time until the next candle or bar? Then you’re in luck. I’ve found a pretty cool candlestick timer to share with you guys. The timing of your candles or bars can be an invaluable tool, especially in day trading, and even more so if you happen to be a scalper. I’m not sure why MetaQuotes (creators of MT4) didn’t include this feature in their MetaTrader 4 platform, but luckily for us there are some talented programmers that are willing to share their work with the MT4 community. As some of you may know, I use a countdown timer in my own trading. In the past, I used a premium indicator for this feature (the one that comes with the Top Dog Trading indicators). I switched to the CCTR (Candle Closing Time Remaining) indicator a couple of years ago, and I haven’t looked back. This is one indicator that I can’t trade without. I use this indicator daily with my main trading system, along with a trading sessions indicator, a true MACD indicator, and a break even Expert Advisor. How to Use This MT4 Candlestick Timer Indicator In the picture above, I’ve marked the candlestick timer positions (0-4). Under the “Inputs” tab of this indicator, change the “location” variable to these numbers to place the timer in its corresponding position. Location 0 – Put the name of the indicator and a small version of the timer in the upper-left corner. Location 1 – Put the candlestick timer in the upper-right corner. Location 2 – Put the timer in the lower-left corner. Location 3 – Put the timer in the lower-right corner. Location 4 – Put the timer in the upper-left corner. I personally use location value 3 (lower-right corner). That way, when I use an Expert Advisor, the two aren’t fighting for space in the upper-right corner. You can display your broker’s server time with this indicator by turning the “displayServerTime” function on. By default, this function is turned off (0). Set the value to 1 to turn this function on. You can also change the font size of the clock as well as the color. The default font size and color are 9 and silver respectively. I use 12 and black on my own charts (see the image above). Installation Instructions: 1. Download the Candle Closing Time Remaining indicator from below and extract the file. 2. Move it to your “Indicators” folder (MetaTrader 4 > MQL4 > Indicators). 3. Start or restart MT4. 4. Open your “Navigator” window, if it’s not already open (Ctrl+N). 5. Drag the Candle Closing Time Remaining indicator onto your chart. 6. Adjust the settings and colors, if needed, and hit the “OK” button. There are other MT4 candlestick timers (or bar timers) out there, but I prefer this one. Once you get used to using a candlestick timer, you will probably also wonder why MetaQuotes did not include something like this in the default platform. I use this indicator every day that I trade, so I hope you find this candlestick timer for MetaTrader 4 as useful as I have.
the system with which I made the most money1. ZZ NRP AA TT [x3] (arrows no repaint) settings ZZspeed 552. SSA of Price Advanced MTF TT (repaint is used only as an arrow filter)settings put on H43. libSSA.dll puts in the folder librariesbest on TF H1, H4 and D1Look at the picture for explanationSUCCESSFUL TRADING FOR ALLMONEY NEVER SLEEP
WRB Hidden Gap MetaTrader indicator — detects and marks WRB. WRB is either a Wide Range Bar (a very long bar) or Wide Range Body (a candlestick with very long body). As WRB by themselves do not offer much information, the indicator also detects Hidden Gaps based on the WRB. It also shows filled and unfilled Hidden Gaps differently, so that it is easier to see the current market situation at a single glance. Optional alerts can be used to get signals when the current price first enters an unfilled Hidden Gap. The indicator is available for both MT4 and MT5. Input parameters: UseWholeBars (default = false) — if true, the indicator will search for Wide Range Bars instead of Wide Range Bodies. WRB_LookBackBarCount (default = 3) — how many bars to use in WRB comparison. The bigger the value the rarer and wider detected WRB. WRB_WingDingsSymbol (default = 115) — a symbol used to mark WRB. A small diamond by default. HGcolor1 (default = clrDodgerBlue) — the first (default) color for Hidden Gap rectangles. HGcolor2 (default = clrBlue) — the second color for Hidden Gap rectangles. HGstyle (default = STYLE_SOLID) — line style for the Hidden Gap rectangles. StartCalculationFromBar (default = 100) — number of bars to look back to mark up the Wide Range Bodies and Hidden Gaps. HollowBoxes (default = false) — if true, the rectangles marking the Hidden Gaps will be empty, otherwise — filled. DoAlerts (default = false) — if true, alerts will be enabled when price enters a Hidden Gap territory. The chart shows an example of Hidden Gap markup on the EUR/USD daily timeframe with default settings. The cyan diamonds are drawn inside WRB bars. Hidden Gaps are depicted using light blue and blue rectangles. Unfilled Hidden Gaps are shown with rectangles spanning past the right edge of the chart. Hidden Gap rectangles change color when an unfilled Hidden Gap of another color currently exists and intersects with a new Hidden Gap. The image shows only Wide Range Bodies (UseWholeBars = false). As you can see, there is not much difference when switching to Wide Range Bars (UseWholeBars = true): This indicator does not generate any trading signals. It offers information about price action to aid a trader with entry and exit signals generated by some other strategy. WRB bars are nearly meaningless, but only WRB can show a Hidden Gap. A Hidden Gap, in its turn, can be treated as a sort of pivot or support/resistance zone. Hidden Gaps can also be treated as the usual price gaps (weekly, for example). An entry signal (by some trading system) coinciding with the price entering a Hidden Gap rectangle can be considered confirmed, while the opposite edge of the rectangle can be used as a target level. If your system generates a trade outside the Hidden Gap territory, the latter can be used either as take-profit or as stop-loss.