The purpose of the MACD indicator is to show changes in the strength, momentum, and direction of the current market. Used correctly, the MACD indicator can be very useful for spotting certain high probability trading setups. Fortunately for us, this is an easy fix. In the image below, there are two versions of the MACD indicator. The top indicator window is the custom MACD True indicator, which displays the indicator in the standard way.
Notice that only a bar graph and red line are displayed. The default indicator displays the traditional MACD line as a bar graph. Again, take a look at the image above. Notice, in the first bullish example, that the MACD displayed on both indicators showed momentum slowing double bottom while price continued lower. This is a form of divergence that can be traded using either indicator.
You can see, just from this one chart, how useful traditional MACD divergence trading can be. If you found this custom indicator to be useful as well, please share this article with other traders.
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I have traded on my demo MACD indicator below zero, but i have lost some trade. Is it adviceble to trade MACD under zero? Thanks for the comment! Even the pros lose trades often. The goal is to either have more winning trades or to make more on your winning trades than you lose on your losing trades or a combination of the two.
The MACD indicator, at least as far a divergence is concerned, works better when the market is trending. 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. Notify me of followup comments via e-mail. You can also subscribe without commenting.
Click the image above to see a larger version. Chris July 16, Hello Esau, Thanks for the comment! Mikey November 4, Chris November 5, Joe November 11, Chris November 11, Sorry Mikey — the comment is meant for Chris.
Let me know if you got if figured out or if you need more help. Chris March 28, Chris June 9, Seran August 8, Chris August 8, Hi Seran, As the title to this blog post states, this indicator is made for MT4.
Andy August 31, Chris August 31, Add Comment Cancel reply Notify me of followup comments via e-mail.More...