The MACD Divergence Metatrader 4 forex indicator is a technical indicator that can be used to gauge divergence between the indicator itself and price.
Thereby indicating a high likelihood that the trend in focus will finish soon and is about to reverse.
The MACD is a well-known technical indicator amongst most forex traders, who will almost certainly deploy it to spot reversal trends.
The indicator uses a technique that is dependent on two exponential moving averages, and its main purpose for doing so is to offer a smooth trend indicator.
As the teal and red lines i.e. the moving average lines separate, the blue histogram becomes bigger.
This is known as divergence between MACD and price.
Deploy the indicator for scalping, day trading and swing trading purposes.
The EUR/USD H1 chart below displays the MACD Divergence Metatrader 4 forex indicator in action.
Basic Trading Signals
Buy Signal: Go long when the red line of the MACD Divergence Metatrader 4 indicator crosses below the teal line in a bottom up fashion when trading below the zero level.
Sell Signal: Go short when the red line of the MACD Divergence Metatrader 4 indicator crosses above the teal line in a top downward manner when trading above the zero line.
Exit buy trade: Close all buy orders if while a bullish trend is ongoing, the lines (teal and red) of the MACD Divergence indicator intersects when above the zero level area.
Exit sell trade: Close all sell orders if while a bearish trend is running, the lines (teal and red) of the MACD Divergence indicator crosses when below the zero level area.
Tips: If the MACD Divergence indicator is properly deployed, it’ll help traders define the turning point in the market very precisely and to initiate orders at almost the best possible price.
MT4 Indicator Characteristics
Currency pairs: Any
Platform: Metatrader 4
Type: chart window indicator
Customization options: Variable (shift, DivSpread, ShowComments, FastEMA, SlowEMA, SignalSMA), width & Style.
Time frames: 1-Minute, 5-Minutes, 15-Minutes, 30-Minutes, 1-Hour, 4-Hours, 1-Day, 1-Week, 1-Month
Type: trend | oscillator
Copy and paste the macd-divergence.ex4 indicator into the MQL4 indicators folder of the Metatrader 4 trading platform.
You can access this folder from the top menu as follows:
File > Open Data Folder > MQL4 > Indicators (paste here)