New ATR indicator
The well-known ATR indicator has undergone significant changes. Now, for greater clarity, it is combined with the MACD indicator.
As a result of connecting the scripts, all standard functions were preserved and new features were added; the new program became even more functional and efficient.
In fact, a new technical tool has appeared that combines the useful properties of long-known Forex scripts.
Now, after installation on the trading platform, you can observe not only the usual curve, but also a multi-colored MACD histogram.
This approach makes it possible to conduct a comprehensive trend analysis and timely identify all possible trends in the Forex market.
Also, now you will not need to place two indicators of the same name on the chart.
If during installation you used standard settings that the indicator already has by default, then it will be displayed below the currency pair chart in a separate window.
Setting up the indicator
The script has a number of simple settings that you can use to achieve the desired result, but if you wish, you can leave the settings at default.
FastEMA – fast EMA of the MACD indicator;
SlowEMA – slow EMA of the MACD indicator;
ATR – trading range period;
Price – the price at which the MACD indicator will be calculated:
0 — close,
1 — open,
2 — high,
3 — low,
4 — median (HL/2),
5 — typical (HLC/3),
6 — weighted (HLCC/4).
The blue line of the iMACD ATR indicator is the result of the MACD shifting by the ATR value, and when the signs of the MACD itself coincide with the result of its shift, the histogram bars are colored.
But in order for two or more bars in a row to be colored at once, it is necessary that the MACD histogram values constantly increase with positive values, and constantly decrease with negative values.
Strategy for using the ATR indicator
The ATR indicator displays the received data in the form of a blue curve; its movement occurs around the conventional coordinate axis, which is equal to zero by default. If the market is in an uptrend, the line moves in an upward direction and vice versa.
At the same time, be careful, it also reacts to small price rollbacks, so it is possible to receive false signals, which should be filtered using the second component of the program.
The MACD indicator performs an auxiliary function and serves as an excellent filter for received signals; it can be used to confirm or refute data received from ATR.
It is also tied to the coordinate axis and reacts to trend changes, moving from one plane to another.
An uptrend is a histogram above the axis and the length of its bars increases.
A downward trend is the histogram below the axis and an increase in bars is also noted.
When the movement weakens, you can observe a reduction in the length of the bars of the MACD indicator; in this case, a quick reversal of the price movement is possible.
If areas of a strong trend occur, the bars are colored green or red depending on which direction the price is moving; in fact, this indicator characterizes the strength of the existing trend.
After observing the work of this indicator for just a few minutes, you will be able to independently determine the most successful entry point into the market; the transaction is closed if the movement weakens and the first signs of an imminent reversal.