MACD_Divergence Indicator For MT5
Table Of Contents:
- MACD_Divergence Indicator For MT5
- Trading ideas with the MACD_Divergence Indicator For MT5
- MACD_Divergence Indicator For MT5 - Buy Entries
- MACD_Divergence Indicator For MT5 - Sell Entries
- MACD_Divergence Indicator For MT5 - Conclusion
The MACD_Divergence Indicator For MT5 draws my favorite divergences on the chart. In my opinion the MACD is the best oscillator to detect divergences. I use these divergences every day in my trading. The indicator draws a histogram with the MACD values and it highlights also the divergences on the histogram. In addition this great indicator also draws the divergences on the price chart. Well done. This is a great indicator. YOu can also configure the indicator with the normal MACD settings like Fast EMA, Slow EMA and Applied Price.
Partially Automated Trading Besides Your Day Job
Alerts In Real-Time When Divergences Occur
The MACD_Divergence Indicator For MT5 uses the fast and slow EMA along with some advanced embedded coding to find the potential divergence in the chart. The intermediate traders know the fact, divergence trading is very hard. The rookie traders often ignore the lessons on regular and hidden divergence as they don’t know how to compare the peaks and bottoms of the price with the oscillator reading.
But with the help of MACD_Divergence Indicator, any traders can find the bullish and bearish reversal. Analyzing the MACD histogram reading is a tough task but if you consider the reading from this MACD_Divergence Indicator, you will notice the process is far easier than it sounds. Though it can find the divergence level in the higher and lower time frame accurately, the traders are requested to focus on the medium and higher time frame data.
The only reason for which you should ignore the lower time frame trading method is a false reading. If you want to earn enough money, you have to entertain all the possible ideas which can reduce the potential risk at trading. Expecting a big profit from this market by ignoring the basic concept of trading is not a wise decision. Let’s see how we should select our trading system for this indicator.
Trading ideas with the MACD_Divergence Indicator For MT5
To the experts, the trading system plays the most important role. If you want to survive as a retail trader, you should learn to take the trades without any greed. By selecting a shorter time frame trading method, you can find many good trade setups but it will also increase the risk.
The shorter time frame tends to generate lots of false signals. Unless you are good with the price action trading method, the shorter time frame trading method is not the right edge. On the other hand, the MACD_Divergence Indicator requires data from a stable market. If the fluctuations in the price are too high, identifying the key swings in the market becomes nearly impossible. Thus the indicator will generate false signals too. So, you have to select a stable asset and emphasize on the higher time frame chart only.
By selecting a higher time frame, you can significantly improve your trading method and earn a big profit without having much trouble. But for that, you need to know the MACD_Divergence Indicator is used in the real market. Let's find out the key functions of this indicator in detail.
MACD_Divergence Indicator For MT5 - Buy Entries
Everyone wonders about the divergence trading method. Some of the retail traders get carried away by seeing the name of the MACD_Divergence Indicator. But the indicator needs to be used strategically. First of all, you have to create a system that can find the potential buying signal in the trading instrument.
After developing the system, test in the demo environment. The result must show a win rate of over 60%. Once you know the trading system which you are using has a decent success rate, start using the MACD_Divergence Indicator. For the long trade, you should see a blue line segment acting as the support line.
Right at the formation of the bullish signal, a blue arrow mark should be present. In the MACD panel, the color of the signal line will be green. The green color signal line will form a valley like a pattern and there you should see a blue color buying arrow mark. Analyze the risk to reward ratio for the trade. If it is more than 1:3, you can take your trade with low risk. But never open any long trade with the risk to reward ratio is 1:1 or less than that.
MACD_Divergence Indicator For MT5 - Sell Entries
To the retail traders, the MACD_Divergence Indicator is more like Holy Grail. It can easily find the bearish divergence in the chart. Before the use of the MACD_Divergence Indicator, you should be locating the resistance level. After marking the resistance level, wait for the bearish rejection in the price.
The bearish rejection in the price should tell you about the potential short trade setup. As you locate the sell setup in the resistance zone, have a look at the MACD_Divergence Indicator. The indicator should support the resistance line with a red line segment. In the MACD panel, you should see a red line formed by the two peaks of the oscillators. Note that all the red arrow should in line with the bearish trade setup zone.
After taking the confirmation from the MACD_Divergence Indicator, analyze the risk to reward ratio. Evaluate the risk factor for the trade before you take any decision. In case you are taking the trades in the minute time frame, keep the risk factors less than 2%. On the contrary, when the daily or the weekly time frame is used, you can risk 3% of your account balance.
MACD_Divergence Indicator For MT5 - Conclusion
Mastering the use of the MACD_Divergence Indicator requires special skills. You might be a new trader but there is nothing to worry about. If you use the demo platform, you can test different kinds of trading systems and slowly build your trading skills. During the development phase of your trading strategy, you should not think about the profit.
Always analyze the price data in a simple format so that you can execute the long and short trade without exposing it to high risk. Regarding the news factor, the retail traders should think about the protection of your account balance. Since the news can create extreme volatility in the price, the traders often become confused with the complicated price dynamics.
To limit the risk, you can ignore the news hours. However, if you manage to master the news trading method, you can expect to find a high RR ratio trade setup based on the MACD_Divergence Indicator. A perfect trade setup can even generate more than a 1:5 RR ratio. But stop getting fooled by seeing the amazing functions of this MACD_Divergence Indicator. No indicator in this world is perfect and you are bound to lose trades when you analyze the market metrics in the wrong manner. So, be safe and think about conservative actions.
