MACD Forex Trading Technical Analysis Signals

Created by Gerald Appel.

MACD and Moving Average FX Crossover System

This indicator can be combined with others to form a Forex system. A good combination with the Moving Average crossover system. A trading signal is generated when both give a signal in same direction.

Technical Analysis of MACD Indicator in FX Trading

MACD Technical Analysis Buy and Sell Signals

Since the MACD indicator uses 26 and 12 EMA to plot, we shall compare these two EMAs with the MACD indicator to determine how these buy and sell signals are generated.

MACD Indicator - Example of MACD Indicator

The MACD indicator is a leading indicator meaning it generates trading signals that are leading compared to price action as opposed to lagging indicators that lag behind the price.

Buy Forex Signal

To eliminate the whipsaws when using the MACD technical indicator it's good to wait for confirmation of the buy signal. The buy confirmation signal is when the two lines cross above the zero mark, when this happens the buy generated is a reliable forex trading signal.

In the example below, the Moving average indicator generated a buy signal, before price started to move up. But it wasn't until the MACD lines moved above the zero line that the buy signal was confirmed, and the Moving Averages also gave a crossover forex signal. From experience its always good to buy after both the MACD lines move above zero center line mark.

Sell Forex Signal

To eliminate the whipsaws when using MACD indicator its good to wait for confirmation of the sell signal. The sell confirmation is when the two MACD lines cross below the zero mark, when this happens the sell signal generated is a reliable forex trading signal.

In the trading example below, the Moving average generated a sell confirmed after MACD lines moved below the zero line at the same time that the Moving Averages gave a crossover sell trading signal.

Where to Sell using MACD Indicator - MACD Sell Signal

How to Place MACD Indicator on Chart in MT4

This tutorial will explain how to place MACD Indicator on a Forex chart in the MT4 Platform. For Technical Analysis: Technical Analysis of MACD.

How to Place Indicators in MetaTrader 4 FX Trading Charts

Step 1: Open Navigator Window on FX Platform

Open Navigator window as shown and illustrated below: Go to "View" menu (click on it), then select "Navigator" window (click), or From Standard Tool Bar click the "Navigator" button or press keyboard short cut keys "Ctrl+N"

On Navigator window, select 'Technical Indicators', (DoubleClick)

Step 2: Expand the Indicators Menu on Navigator

Expand the menu by clicking the expand button marker (+) or doubleclick the "indicators" menu, after this the button key will then now appear as (-) and will now be shown as a list as shown below.

From the Above window you can then place any technical indicator you want on the chart.

Placing MACD on FX Trading Chart

Step 1: Select the MACD button on the MT4 list of indicators as displayed below:

Step 2: Double click MACD Button, and click okay to insert the indicator on chart as shown and illustrated below:

Edit Indicator Settings

To Adjust Settings, right click on the MACD Indicator, choose properties and then edit settings using pop up menu that pops and click ok button after you've changed settings.

The following popup appears and MACD Technical Indicator settings can be edited from this pop up panel.