The theory surrounding the MACD as illustrated by its creator Gerald Appel reveals the difference of fast and slow EMA along with a signal line (which is also an EMA) is calculated for a difference.
The Range Weighted Average MACD MT5 forex indicator does not use the EMA for MACD calculation, instead it deploys the range weighted average.
It uses the same method for its signal line, which implies that the indicator is a kind of “all range weighted average” MACD.
The indicator can be deployed in the same manner the MACD is being put to use.
Some add-ons like color changes is added on the MACD to alert us of line crosses, while the OsMA is displayed as a filled region to enhance readability of the MACD.
The EUR/JPY H4 chart below displays the Range Weighted Average MACD Metatrader 5 forex indicator in action.
Basic Trading Signals
Buy Signal: Go long when the dotted line crosses the undotted line of the Range Weighted Average MACD Metatrader 5 forex indicator in a bottom up fashion.
Sell Signal: Go short when the dotted line intersects the undotted line of the Range Weighted Average MACD Metatrader 5 forex indicator in a top downward manner.
Exit buy trade: Close all buy orders if while a bullish trend is ongoing, the lines of the Range Weighted Average MACD MT5 indicator crosses.
Exit sell trade: Close all sell orders if while a bearish trend is running, the lines of the Range Weighted Average MACD indicator intersects.
Tips: Alternatively, forex traders can get market clues from the bolder (thicker) dual colored line of the indicator and the indicator performs excellently well during trending markets.
MT5 Indicator Characteristics
Currency pairs: Any
Platform: Metatrader 5
Type: chart window indicator
Customization options: Variable (Fast period, Slow period, Signal period, Price), 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 Range weighted average 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)