MACD is short for moving average convergence/divergence, it is one of the most popular Metatrader 4 forex indicators and used in a lot of forex trading strategies and trading systems.
The indicator is composed of two exponential moving averages and one simple moving average with default period set to 9.
The MACD oscillator fluctuates above and below the zero level.
The trend is considered to be bullish when the MACD is trading above the zero line and considered to be bearish when it is trading below the zero line.
This indicator is used for scalping, day trading, swing trading and position trading.
It is used for all forex pairs including majors, cross pairs and exotics.
The EUR/USD H1 chart below shows the MACD forex indicator in action.
Basic Trading Signals
MACD trading signals are simple to interpret and goes a follows:
Buy Trade: Go long when the indicator trades above the zero level from below, trend changes from bearish to bullish.
Sell Trade: Go short when the indicator trades below the zero level from aboce, trend changes from bullish to bearish.
Tip: Sometimes the MACD indicator is also used to trade divergences between MACD and price.
MT4 Indicator Characteristics
Currency pairs: Any
Platform: Metatrader 4
Type: chart pattern indicator
Customization options: Variable (Fast EMA Period, Slow EMA Period, Signal SMA Period) Colors, width & Style.
Time frames: 1-Minute, 5-Minutes, 15-Minutes, 30-Minutes, 1-Hour, 4-Hours, 1-Day, 1-Week, 1-Month
Copy and paste the MACD.mq4 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)