How to Trade Using MACD

MACD and Its Power in Forex Trading [With Pictures]

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Mar 29,  · Nearly always use the default settings. Especially on 15 min, 1 hour and daily time frames. MACD rules the 15 minute chart on Eur/USD, at least for divergances. The default MACD inputs of 12, 26, and 9 are the more common settings for the indicator. (The fast MA is listed first, followed by the slow MA, followed by .

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Hope that helps you. MT4 designers should be shot for this. Thanks for providing the correct one. If you have and your MACD line is not showing up, you may need to change the color of it in the properties of the indicator.

Is it difficult to program the actual divergence lines in this indicator to show up in the charts? I have no idea, Andrew. There are some indicators out there that already do it, though. The charts just get cluttered.

Hi Chris, don t know how to thank you enough,imagine using a fake MACD for over 5 years,your article is simply superb,keep it up man. I knew this would be useful to some of you as well. Hi Chris Thank you for the great information that you provided. As the title to this blog post states, this indicator is made for MT4.

I just downloaded and installed this on the latest build of MT4. Keep in mind that this indicator is for the regular MT4 installation. You cannot use custom indicators with the mobile MT4 app. This will also not work on MT5. I trade mobile rather than on PC. You can get really cheap used and refurbished laptops on eBay if you need one.

However, your trading decisions should be made using the best tools available to you. Do you have the line drawing tool you used in your illustration? The lines in the illustration above were drawn by me in a photo editing software to illustrate the differences between the MACD signals you get from the stock MT4 MACD indicator and a traditional MACD indicator, like the one you can download from this page. They just ended up cluttering my charts more than necessary, and I hate cluttered charts.

I was confused for sometime. I would have guessed that this was actually a valid strong signal: But you dismissed it. Was it because the bull candle was not long enough? OMG you are turning me into an awesome trader….

I payed to join a trading group on facebook but it was well worth it cause someone posted an LuckScout article and I came and got hooked on the site and found the best trading system in my opinion that is very easy for me to understand. Cannot thank you enough! Sir, will you please let me know the perfect timeframe for intra day trading. And can I also use this stretagy on any currency pairs?

I had a basic knowledge when i started my trading carrier. Now i am trading with my demo account. According to your practical strategy i think trading is much more interesting and important. I followed many sites and red many articles to improve my knowledge, Accidentally i found this site and i think i got in to the right track!

Hope to get success with patience. Candles are my favorite. Try never to miss your great articles. Thank you Chris for sharing your knowledge without greed! Thanks Chris for this enlightening teaching. I just had a recent illustration: Both showing regular bearish divergence on RSI. What a came across was little confusing to me. I know that the slower setting produce fewer and stronger signals. When you have a moment, please have a look at the most recent divergence that happened on this EURUSD daily chart and see if you can explain to me and new comers what took place.

If you notice the slower macd setting followed the price where as the faster showed divergence. The fast MACD says you can buy, the slower one says you should not buy. The slower one is used to form less trade setups.

This eBook shows you the shortest way to acheive Financial Freedom: Just before you go, did you check This System? Make sure to do it now, otherwise you will regret. A Mechanical Indicator for All Traders. Article by LuckScout Team. July 30, at 2: July 31, at 6: August 3, at August 6, at 9: September 12, at 6: September 12, at 9: October 9, at 2: October 9, at October 12, at 1: October 12, at 3: October 12, at 6: October 12, at 7: October 13, at November 21, at 9: November 21, at November 22, at November 22, at 1: January 2, at 9: January 2, at January 2, at 1: January 3, at 1: January 2, at 5: January 3, at 7: January 13, at 9: February 22, at 3: February 23, at February 25, at April 7, at April 13, at 9: May 10, at 3: May 14, at 6: May 14, at 9: May 14, at 2: May 14, at 5: June 22, at 1: July 11, at July 12, at July 12, at 3: July 16, at 4: July 21, at Bottom line, the bullish MACD trade you just saw generated 16 pips, which equals to 0.

Although many traders are not familiar with this, you should know that the MACD trading indicator also gives signals that the Forex pair is overbought or oversold. Overbought MACD — The indicator gives an overbought signal when you notice the two lines being relatively high compared to previous highs. Oversold MACD — The indicator gives an oversold signal whey you see the two lines being at a relative low compared to previous bottoms.

If you experience difficulties in recognizing the sharp switch of the MACD line, there is a quick fix to this problem. Refer to the MACD histogram to identify unusually big bars. We will start with the classical way of trading with the Moving Average Convergence Divergence indicator.

The image below will give you a better picture about this:. You see five different MACD signals on the image. The first signal comes with the first green circle on the indicator — a bullish crossover. The second signal is a bearish crossover that leads to a price decrease.

The third signal is a bit more special. The reason for this is that the third green circle points to the confirmation of two MACD signals. The first signal is an obvious bullish crossover. The second signal comes with the formation of the second MACD bottom that is increasing. But at the same time, we see that the second price action bottom is decreasing. This confirms the presence of a bullish divergence on the chart. The last signal comes at the end of the price increase.

Although it looks like a standard bearish MACD crossover, there is something more in this signal. Notice that the two MACD lines are relatively high in the indicator area.

In the red circle, you will see that the change in the direction of the MACD line is so sharp, that there is like a corner curve on the line. The next trading strategy we will discuss involves the usage of the MACD histogram. The signals of the MACD histogram strategy come when you see a bar that is opposite to the general histogram direction. Notice that this strategy is more successful on smaller chart time frames due to the bigger candle shifts. Notice that I have increased the size of the MACD indicator so that the bars will be bigger and easier to read.

The purple lines on the Moving Average Convergence Divergence histogram indicate changes in the histogram trend. The green circles show the respective signals. See that the histogram signals appear prior the actual MACD crossover.

This is why this strategy is good for making early entries in the market. However, the false signals of this trading strategy are likely to be more. In this relation, it would be better if you use an additional indicator to confirm your entries on the chart.

Also, notice that the MACD histogram strategy does not involve the usage of the lines. You can totally remove the two lines if you rely only on the histogram. However, I will advise you not to do so. After all, it is not a bad thing to have additional signal providers on your indicator. The example below will show you couple trades based on MACD crossover signals.

The Best MACD Indicator for MetaTrader 4 (MT4)

The thing is that the Stop is not meant to be hit.

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In this relation, we recognize two types of MACD crossover: It signalizes that the Forex pair is about to do a bullish run.

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