ZeroLag MACD Indicator For MT4



Table Of Contents:

  1. ZeroLag MACD Indicator For MT4
  2. Understanding the Divergence
  3. Bullish and bearish divergence
  4. Execution of the trades
  5. Setting up the stop loss and take profit
  6. Dealing with the losing trades
  7. Lower time frame trading method

Indicators are nothing but helping tools for the retail traders. If you can learn the use of an indicator, you can easily make a decent profit from this market. Many professional traders in the Forex market is making a decent profit by using the ZeroLag MACD Indicator For MT4. Before we learn to use this indicator, we need to know why this indicator is used by thousands of professional traders. We all know there are two types of indicators. The leading indicators always give early signals and the lagging indicator generates late signals. So, you can execute high-quality trades based on real-time market data.

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Alerts In Real-Time When Divergences Occur

 

You can easily solve this complex problem by using the ZeroLag MACD Indicator For MT4. The signals generated by using the ZeroLag MACD Indicator For MT4 always reflect real-time price movement of a certain asset. But to take advantage of this indicator, you must use it in the higher time frame. Let’s learn the proper way to use the ZeroLag MACD Indicator For MT4.

 

Understanding the Divergence

To use the ZeroLag MACD Indicator For MT4, you need to have a clear understanding of the term divergence. Divergence is nothing but the difference between the highs and lows of price movement and oscillators reading. Some of you might say the divergence trading strategy is extremely complex since you need to have a clear understanding of hidden divergence. But with the help ZeroLag MACD Indicator For MT4, you can easily execute high-quality trades by using the traditional concept of divergence. From the above figure, you can easily spot a bullish trade setup based on divergence. Let’s learn more about divergence so that we can execute quality trades with an extreme level of precision.

Bullish and bearish divergence

If the price of a certain asset makes higher high and the ZeroLag MACD Indicator For MT4 also creates higher high in the indicator window, you can consider it as a bullish divergence. Usually, this pattern is found at the bottom of a downtrend.

In the case of bearish divergence, you will spot higher highs in price and oscillators reading. If the ZeroLag MACD Indicator For MT4 reading replicates the price movement in a higher time frame, you can expect a bearish reversal in the market.

Execution of the trades

Trading the market with the ZeroLag MACD Indicator For MT4 is fairly easy. Now you know the proper way to find the bearish and bullish scenario of the market by using the divergence. Let’s give you a simple example to make things easier.

Figure: Bearish divergence spotted in the daily time frame

From the above figure, you can see, the USDCHF pair has made a nice higher high in the daily chart. At the same instance, you will also spot higher high in ZeroLag MACD Indicator For MT4 curve. So, it’s very obvious the market with a drop. So, you can easily execute a short order and make a decent profit from this market. Though the trading strategy is extremely profitable, some professional traders prefer to use simple trend line, horizontal support, and resistance level to increase the win rate. Things might seem a little bit confusing at the initial stage but if you use a demo account, it won’t take much time to master these skills.

Setting up the stop loss and take profit

Setting up the stop loss and take profit level is a little bit complex when you rely on leading or lagging indicators. But things are really easy when you use the ZeroLag MACD Indicator For MT4. For a bearish trade setup, you can use the most recent high to set your potential stop loss. For bullish trade setup, use the most recent low to set the desired stop loss.

When it comes to setting up the take profit level, things greatly varies. You can either use the potential support or resistance level or use the trailing stop loss to maximize your profit factors. Always remember, you are trading the market based on reversal trading strategy. Unless you have a 1:3+ risk-reward ratio, you should never execute the trade. And try to trade the market in the higher time frame since it will significantly improve your win rate.

Dealing with the losing trades

After learning the use of ZeroLag MACD Indicator For MT4, the rookie traders get carried away with emotions. They consider it as the Holy Grail in the Forex market and start taking excessive risk. You need to understand the fact, trading is nothing but dealing with probability. If you intend to make a profit from this market, you must prepare yourself to embrace the losing trades. No matter how good the trade setup is, you are bound to lose trades regularly. Take your time and try to understand how this market works in the long run.

You might have the best trading system in the world still you might have to lose a few trades in a row. But this doesn’t mean you follow the aggressive trading strategy and try to recover the loss. Follow conservative trading strategy and stick to your trading system. And never risk more than 2% of your account balance.

Lower time frame trading method

We all know the ZeroLag MACD Indicator For MT4 works best in the higher time frame. Does this mean we can't use it in the lower time frame? The experienced traders often use two ZeroLag MACD Indicator For MT4 with different settings. It allows them to filter the best possible trades in the lower time frame. But to trade the lower time frame you must have strong fundamental analysis skills. Always remember, high impact news is the major price driving catalyst in the Forex market. So, never execute any trade in the lower time frame based on ZeroLag MACD Indicator For MT4 without knowing the schedule of major news.

If you intend to trade the lower time frame, make sure you are not risking more than 1% of your account balance. You will have a lower success rate in scalping trading strategy. So, try to trade the market with at least 1:4+ risk-reward ratio so that you can easily recover the loss.

 

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