The Moving Average Convergence/Divergence (MACD) was created by Gerald Appel in the late 1970, to show changes in momentum, strength, duration and direction of a trend in a currency pair’s price.
As an oscillator, the MACD indicator is comprised of three times series that are calculated from historical price data, most frequently the closing price.
Defining bounds is one thing the original MACD lacks, and the Normalized Smoothed MACD MT5 forex indicator properly adds a min/max based limits.
Signals on the Normalized smoothed MACD Metatrader 5 indicator can be delivered in the form of color changes of the MACD or those of the signal line (that corresponds to the signal line intersecting the MACD line).
The EUR/CAD H4 chart below displays the Normalized Smoothed MACD Metatrader 5 forex indicator in action.
Basic Trading Signals
Buy Signal: Go long when the dotted line (normalized MACD signal line) of the Normalized Smoothed MACD Metatrader 5 forex indicator intersects the undotted line (normalized MACD) in a bottom up manner below the zero level.
Sell Signal: Go short when the dotted line (normalized MACD signal line) of the Normalized Smoothed MACD Metatrader 5 forex indicator intersects the undotted line (normalized MACD) in a top downward fashion above the zero level.
Exit buy trade: Close all buy orders if while a bullish trend is ongoing, the lines of the MACD indicator crosses.
Exit sell trade: Close all sell orders if while a bearish trend is ongoing, the lines of the MACD indicator crosses.
Tips: The Normalized Smoothed MACD MT5 forex indicator has the tendency of performing well as a standalone tool, however, it can yield optimum trading results when combined with other technical tools.
MT5 Indicator Characteristics
Currency pairs: Any
Platform: Metatrader 5
Type: chart window indicator
Customization options: Variable (MACD fast period, MACD slow period, Signal period, Price, Smoothing period, Normalization period), Colors, 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 Normalized smoothed MACD.ex5 indicator into the MQL5 indicators folder of the Metatrader 5 trading platform.
You can access this folder from the top menu as follows:
File > Open Data Folder > MQL5 > Indicators (paste here)