MACD 2 Line Indicator
Platform: MT5 Type: Momentum Last update: October 16, 2024The MACD 2 Line Indicator is obviously based on the Moving Average Convergence Divergence indicator but it has 2 lines that form a cloud. The difference between the MACD and the signal line is presented in the form of a color histogram.
How to apply the MACD 2 Line in trading?
General trading rules for the MACD 2 Line Indicator are pretty simple. Green cloud indicates buy trade opportunities and red cloud triggers sell trades. In this example, we’ve used it in conjunction with a 100-period Exponential Moving Average to determine the overall trend direction. Detailed instructions are provided below.
Buy Signal
Follow these steps for a long trade:
- Overall trend is bullish (EMA slope is upward)
- Price is above EMA and doesn’t touch it
- The cloud switches from red to green
- Buy trade is triggered after the above conditions are met
- Set stop loss a few pips below the last swing low of the market
- Take profit or exit trade whenever the cloud changes color or use your own method of trade exit
Sell Signal
Follow these steps for a short trade:
- Overall trend is bearish (EMA slope is downward)
- Price is below EMA and doesn’t touch it
- The cloud switches from green to red
- Sell trade is triggered after the above conditions are met
- Set stop loss a few pips above the last swing high of the market
- Take profit or exit trade whenever the cloud changes color or use your own method of trade exit
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