How Do You Use MACD MT5 Indicator?
MACD indicator Analysis & MACD Buy & Sell Signals
Developed by Gerald Appel,
MACD indicator is one of the simplest, reliable and most commonly used indicator.
MACD indicator is a momentum forex oscillator and also a forex trend following indicator.
Construction of MACD
The construction of MACD indicator calculates the difference between two moving averages and then draws that as the MACD 'Fast' line: the a second MACD 'Signal' line is then calculated from the resulting MACD 'Fast' line and then drawn on the same panel window as the MACD 'Fast' line.
- MACD 'Fast' line - Blue Line
- MACD 'Signal' line - Red Line
The 'standard' MACD values for the MACD 'Fast' line is a 12 price period exponential moving average and a 26 price period exponential moving average and a 9 period exponential moving applied to the MACD fast line, this draws the MACD 'Signal' line.
- MACD Fast line = difference between 12 and 26 exponential moving averages
- MACD Signal line = moving average of this difference of 9-periods
How Do I Add MetaTrader 5 MACD Indicator in MT5 Charts
How to Generate Buy and Sell Signals
MACD indicator is commonly used as a trend following indicator and works most effectively when analyzing trending forex market movements. The three common forex methods of using MACD indicator to generate forex signals are:
MACD Indicator Crossovers Forex Signals:
MACD Fast line/Signal line Crossover:
- A buy signal is generated when the MACD Fast line crosses above the MACD Signal line
- A sell signal is generated when the MACD Fast line crosses below the MACD Signal line.
However, in a strong forex trending market this MACD indicator crossover signals gives a lot of forex whipsaw signals - the best MACD indicator crossover signals to use would therefore be the Zero Line Crossover Signal that is less prone to forex whipsaw signals.
MACD Zero Line Crossover Signals:
- When the MACD Fast line crosses above zero center line level a forex buy signal is generated.
- When the MACD Fast line crosses below the zero center line level a forex sell signal is generated.
MACD Divergence Trading:
When analyzing forex divergences between the MACD indicator and price - MACD indicator can prove to be very effective in identifying potential trend reversal and trend continuation points in forex price movement. There two types of forex divergences:
- Classic MACD Divergence Signals
- Hidden MACD Divergence Signals
MACD Overbought/Oversold Conditions:
MACD indicator is also used to identify potential overbought and oversold conditions in the price action movements.
These MACD indicator overbought and oversold levels are generated if the shorter MACD indicator lines separate dramatically from the median - this is a forex signal that forex price action is over-extending and the price will soon return to more realistic levels.
MACD Indicator and Moving Average Forex Crossover Strategy
MACD indicator can be combined with other indicators to form a system. A good indicator combination with MACD indicator is the Moving Average crossover forex system. A trading signal is generated when both MACD indicator and Moving Average crossover forex system gives a signal in same direction.
Technical Analysis of MT5 Indicator MACD Indicator
How to Add MT5 MACD Indicator in MT5 Charts
Step 1: Open MT5 Software Navigator Panel
Open MetaTrader 5 Navigator panel as illustrated below: Go to 'View' menu (click), then select 'Navigator' panel (click), or From Standard Tool Bar click the 'Navigator' button or press keyboard MT5 short-cut keys 'Ctrl+N'
On MT5 Navigator window, choose "Indicators", by Double Clicking
How Do I Use MT5 MACD Indicator?
How to Add MACD MT5 Indicator
Expand the menu by clicking the expand button (+) or double click the 'indicators' menu, after this the button will appear as (-) and will now illustrate a list of MT5 indicators as shown below - choose the MACD indicator from this list of MT5 indicators so that you can add the MACD MT5 indicator in the MT5 chart.
How Do You Use MT5 MACD Indicator?
How Install and Add Custom MACD Indicator on MetaTrader 5?
If the MT5 indicator that you want to add on the MT5 charts is a custom MT5 indicator - for example if the MACD indicator that you want to add is a custom MT5 indicator you will need to first add this custom MACD MT5 indicator in the MT5 platform and then compile this custom MACD indicator so that this newly added MACD MT5 custom indicator appears on the custom forex indicators list on the MetaTrader 5.
To learn how to add MACD indicators in MetaTrader 5 - how do you add MACD indicator window to MT5 software? - how do you add MACD custom technical indicator on MetaTrader 5? - How to add a custom MACD custom technical indicator on MetaTrader 5.
How Do I Use MT5 MACD Indicator?
