MACD_Colored_Histogram_2019 Indicator For MT4
Table Of Contents:
- MACD_Colored_Histogram_2019 Indicator For MT4
- Trading ideas with the MACD_Colored_Histogram_2019 Indicator For MT4
- Interpreting the MACD_Colored_Histogram_2019 Indicator For MT4
- Placing a BUY using the MACD_Colored_Histogram_2019 IndicatorFor MT4
- Placing a SELL using the MACD_Colored_Histogram_2019 Indicator For MT4
- MACD_Colored_Histogram_2019 Indicator For MT4 - Conclusion
The MACD_Colored_Histogram_2019 Indicator For MT4 is an indicator based on the traditional Moving Average Convergence/Divergence indicator to detect trend reversals through colour-changes in ongoing trends. When the MACD of the indicator has a green colour then it signals a buy opportunity, when the MACD is red then it signals a bearish trade opportunity and when the MACD changes to grey from either red or green periods then it signals the inception of a retracement within the underlying trend - futhermore you also have the option of using the modified Bollinger Bands to correctly time your entry and exit points thus allowing you to maximise on all the trades you take using the indicator.
Partially Automated Trading Besides Your Day Job
Alerts In Real-Time When Divergences Occur
Trading ideas with the MACD_Colored_Histogram_2019 Indicator For MT4
The only difference from the standard MACD indicator is that the MACD_Colored_Histogram_2019 Indicator For MT4 is that with the MACD_Colored_Histogram_2019 Indicator For MT4, it is easy to identify the type of trend in the market by just looking at the colour of the histogram bars.
You can also customize the colours as you like depending on the background of your MT4 trading platform.
For this guide, we shall use the original colour setting of Lime, Red, SlateGrey, and Magenta. Magenta is the colour of the signal line that oscillates about the centerline of the indicator. The centerline is the horizontal continuous grey line at zero levels along the vertical scale of the indicator chart.
Interpreting the MACD_Colored_Histogram_2019 Indicator For MT4
Just like the standard MACD indicator, the MACD_Colored_Histogram_2019 Indicator For MT4 shows the market trend and the trend momentum.
To distinguish the trend indicated by the indicator, you should look on which side of the centerline the histogram forms, and the colour of the histogram. You should also look at the signal line.
For a bullish trend, the histogram and the signal line are both above the centerline. On the other hand, for a bearish trend, the histogram and the signal line should be below the centerline.
For bullish trends, the trend is strong when the histogram is Lime. On the other hand, the bearish trend is strong when the histogram is Red. In both cases (bullish and bearish trends) when the histogram turns SlateGrey, it is an indication that the trend has changed. Therefore, SlateGrey colour indicates the start of a trend.
When the histogram colour changes from Lime to SlateGre, it is an indication that the bullish trend has come to an end and a bearish trend has started. On the other hand, when the histogram colour changes from Red to SlateGrey, it is an indication that the bearish trend has come to an end and a bullish trend has started.
To distinguish the momentum of the trend indicated by the indicator, you should check on the colour of the histogram and the length of the histogram bars. When the momentum increases, the length of the histogram bars increases for both bullish and bearish trends. That is why when the SlateGrey histogram bars start to form, they continue to decrease in size until they reach the centerline.
Placing a BUY using the MACD_Colored_Histogram_2019 IndicatorFor MT4
A buy order should be placed when the histogram is below the histogram and it turns from Red to SlateGrey. Secondly, the signal line should be lower than the length of the SlateGrey histogram bars.
In case you are late and you find the market when the change of colour from Red to SlateGrey has already taken place, it is good if you placed the buy before the lime histogram bars start forming or when they are still short. This is because when the lime histogram bars become too long, you may not make a considerable profit since the trend reversal/change could be just around the corner.
To close the buy order, you should wait till the histogram moves above the centerline and its colour changes from Lime to SlateGrey; meaning that the bullish trend has changed to bearish. The buy order should be close at the beginning of the first SlateGrey histogram bar.
However, there are cases when after the colour changes from Lime to SlateGrey, the indicator then generates Lime histogram bars once the size of the SlateGrey bars decreases to the centerline. In such cases, it shows that the market was just experiencing a small pullback before continuing with the bullish trend. you should open another BUY order once the green histogram bars appear.
Placing a SELL using the MACD_Colored_Histogram_2019 Indicator For MT4
A sell should be placed when the histogram is above the histogram and it turns from Lime to SlateGrey. Secondly, the signal line should be above than the length of the SlateGrey histogram bars.
In case you are late and you find the market when the change of colour from Lime to SlateGrey has already taken place, it is good if you placed the buy before the red histogram bars start forming or when they are still short. This is because when the red histogram bars become too long, you may not make a considerable profit since the trend reversal/change could be just around the corner.
To close the sell order, you should wait till the histogram moves below the centerline and its colour changes from Red to SlateGrey; meaning that the bearish trend has changed to bullish. The sell order should be close at the beginning of the first SlateGrey histogram bar.
There are also cases when after the colour changes from Red to SlateGrey, the indicator then generates Lime histogram bars once the size of the SlateGrey bars decreases to the centerline. In such cases, it shows that the market was just experiencing a small pullback before continuing with the bearish trend. you should open another SELL order once the Red histogram bars appear.
MACD_Colored_Histogram_2019 Indicator For MT4 - Conclusion
As a version of the MACD indicator, the MACD_Colored_Histogram_2019 Indicator For MT4 function exactly as the standard MACD. The only thing that is added is the colours to make it easier for you to interpret the indicator especially on when the trend change happens.
The MACD_Colored_Histogram_2019 Indicator For MT4 makes it easy even for the Forex beginners to use the MACD indicator, which despite being a very common forex trading indicator could be difficult to use especially for inexperienced traders.
Additionally, this indicator can be used on its own without requiring any other indicator since it indicates the trend change and the momentum. Its trend change indication is so precise that there is no need for another indicator to show you when the market enters the overbought and oversold conditions.
