7_Macd Indicator For MT4
The 7_Macd Indicator For MT4 allows the traders to learn about the overbought and oversold condition of the currency pairs. If the blue bars in the histogram formed above the reference line, you can expect a bullish tone. On the contrary, blue bars forming below the histogram indicates selling momentum.
The 7_Macd Indicator For MT4 works on the basis of 5 unique input parameters. Fast EMA, Slow EMA, Signal EMA, Plot Arrow, and Hist Threshold is the adjustable parameters for this indicator. The novice traders might be worried thinking that changing these 5 input parameters can cause the indicators to malfunction. Indeed it is true since a faulty setting in the input parameters can cause faulty reading.
But you don’t have to worry about these settings as the default settings are well-calibrated to deal with the most trading instrument. Once you know the function of the 7_Macd – indicator, you will never think to change the default settings. This indicator creates grey histogram bars with purple and blue signal lines. The professional traders rely on the position of the histogram in contrast to the signal lines to take their trades.
But having a fair knowledge about the indicator is not enough since you need to create a robust trading technique or else you won’t get the desired result by using the indicator. In any indicator, you must be careful with the trading strategy. If you select the wrong strategy, never expect to use the indicator as a filter. Take your time and work hard on your system so that you can say, your system has the potential to deal with different kinds of trade setups.
Trading ideas with the 7_Macd Indicator For MT4
We all know the majority of the retail traders end up with overtrading problems. While developing the trading strategy, it's better you chose to trade in the higher time frame since it can significantly reduce the problem of overtrading. In fact, a higher time frame also works well with the 7_Macd Indicator.
It doesn’t mean, you won’t be able to use this indicator in the lower time frame. But in the lower time frame, you must be extremely careful about the trade setups. Another key issue the news factors. If you chose to trade in the lower time frame, you must stay tuned to the news data. In short, you have to master fundamental analysis. Once you become good at fundamental analysis, you will be able to find reliable trade setups and the signals from the 7_Macd Indicator will be enough to differentiate the good setups.
But for the rookies, we highly recommended not to use any scalping system. The best way to achieve success at trading is to learn the importance of a higher time frame trading strategy. As you develop the skills to take the trades in the higher time frame, it’s just a matter of time you learn to use the 7_Macd Indicator. Let’s see how the elite traders use this indicator to make their trades.
7_Macd Indicator For MT4 - Buy Entries
Before you move to the indicator reading, you have to find the demand zone. A demand zone is usually backed by a cluster of support candles. In some cases, it will be formed by the combination of the highs and lows in the market. After determining the crucial support, wait for the bearish retracement. As the price test the support level, bearish retracement will come to its end.
The price pattern will show a nice bullish price action signal and this the moment to take the data from the 7_Macd Indicator. The grey histogram should be above the reference line. In the ideal case, you should see a bullish cross in the blue and purple signal line. This mean, the blue, and the purple signal line will pass above the zero lines from the negative side.
After getting confirmation from the 7_Macd Indicator, evaluate the risk to reward ratio. If it is better than 1:3, calculate the lot size in such a way so that you don’t have to lose more than 2% of the balance. Open your long trade with confidence and let the market do its duty.
7_Macd Indicator For MT4 - Sell Entries
Professional traders know taking any trade is very hard. In the short, we can follow the exact opposite steps used in the long trade. But we will show you a different use of the 7_Macd Indicator. People often say that taking trades at the break of a major level is very hard. They say so because they don’t have a handy indicator like the 7_Macd Indicator.
Draw the support level and wait for a strong break. Prior to the break, you should see a bearish cross in the blue and purple signal line. Since you are trying to open a short trade right at the break of support, you need to wait till the blue and purple lines cross below the green signal line. As soon as it does, analyze the length of the grey histogram bar.
If you see a steady increase in the length, you should be expecting another strong bearish rally. Evaluate the risk and find your risk to reward ratio. Since the trade is taken on a break of the support, the minimum RR ratio for such a trading method must be 1:3. Avoid taking the trades if the RR ratio is 1:2.
7_Macd Indicator For MT4 - Conclusion
By now it should be clear that the 7_Macd Indicator is a very advanced tool. Depending on the skills of the trader, it can be used in multiple ways. You can make it the prime tool to filter the good signals or you can use it to discard a trade setup. As long as you follow the stated rules in this guide, you should be able to secure quality trades and protect the capital.
Things might get messy while dealing with the high impact news factor which has the potential to change the trend. To deal with such conditions of the market, we recommended the trader not to take any trade. Study the price moment after the major news release. See how the market and the 7_Macd Indicator reacts. Soon, you will be able to develop a generic profile for taking the trades in such a state of the market. But trading such a condition requires lowering down the risk to 1% or even less.
Never consider the aggressive approach as a quick way to earn money. In the Forex market, you need to depend on a slow and reliable method. Regarding the 7_Macd Indicator, try to master its function by using the default settings. As you gain more experience, try changing different parameters to get a much more precise reading from this premium tool.