macd indicator, description and settings
The macd indicator, proven by time and by many professional traders, allows you to trade Forex quite effectively.
Its new version has become even more accurate and functional; it analyzes the trend based on the current situation taking into account historical data, which makes its use even more justified and effective.
The visual display of the received data has been improved, new operating parameters have been added.
Now, to improve the work, two new levels are displayed in the indicator window; they allow you to avoid false signals, you open transactions only at the most favorable moments.
A moving average was also added, thanks to which the movement of the main trend in Forex is quite accurately conveyed. It is displayed as a blue curved line.
After adding a currency pair to the chart, you will see the following picture:
Setting up the macd indicator
The main settings of this instrument relate to the specific period selected for trading and the features of calculating the moving average.
You will find a more detailed description of them in the archive after you download the macd indicator.
The script's work is displayed in a separate window and does not interfere with monitoring the currency pair chart itself. The main indicators are formed in the form of a histogram, and this allows you to evaluate not only the direction of the trend, but also analyze its additional properties.
When tested, the macd histogram indicator showed quite good results, more than 70% of transactions were profitable, this characterizes its work only on the positive side.
Trading strategy using the macd indicator.
The main strategy for trading using this instrument is simple trading in the direction of the prevailing trend. Your task is to determine the most successful point to open an order and make a forecast of further price movement.
The macd histogram indicator allows you to determine the most successful entry points into the market, usually these are the places where the length and color of the indicator bars change, and the moving average line serves as an additional reference point.
A change in the direction of movement of the main trend of the exchange rate can be observed by the movement of the histogram itself below or above the zero line; the colors of the bars act as an additional reference point.
Green color – there is an upward trend in the market – buy transactions.
Red color – the price of the currency pair is decreasing – a sell transaction.