Introduction to the MACD Colored Histogram Indicator
The MACD Colored Histogram Indicator is a high-demand trading gauge as the Moving Average Convergence and Divergence indicator is one of the most popular forex indicators out there. The MACD Color Histogram is a variation of the classic MACD and will be further described in the next parts of this article.
The MACD Colored Histogram Indicator fits all kinds of timeframes and currency pairs. It is displayed directly on the main trading chart. The default settings can be modified directly from the input tab. Feel free to experiment with the settings and parameters to fit your personal preferences.
Closer look on the MACD Colored Histogram Indicator
The main difference between the original MACD and MACD Colored Histogram is that it clearly shows traders where price might reverse or resume momentum. When you look at the chart, you will notice that histogram bars change colors to indicate trend and momentum direction. There are green, red and grey bars. Green bars indicate bullish momentum, red bars indicate bearish momentum, and grey bars indicate potential reversal coming underway.
Buy Trade Example
In the example below, trade is based on the bullish divergence that is taking place. Histogram bars made a lower low and higher low, while price made a higher low and lower low. The trade was triggered at the first grey histogram bar after divergence.
Sell Trade Example
In the example below, trade is based on the bullish divergence that is taking place. Histogram bars made a higher high and lower high, while price made a lower high and higher high. The trade was triggered at the first grey histogram bar after divergence.
How to set up the MACD Colored Histogram indicator in MetaTrader (MT4)?
Download the MACD Colored Histogram.rar archive at the bottom of this post, unpack it, then copy and paste the MACD Colored Histogram.ex4 or MACD Colored Histogram.mq4 indicator files into the MQL4 folder of the Metatrader 4 trading platform.
You can gain access to this folder by clicking the top menu options, which goes as follows:
File > Open Data Folder > MQL4 > Indicators (paste here).
Now go to the left side of your MT4 terminal. In the Navigator find the gauge name, right-click it and select Attach to the chart.
Summary Of That Forex Indicator
The MACD Colored Histogram indicator is well worth adding to your trading collection. A good forex indicator will most probably enhance your chance of success. Nonetheless, remember about having realistic expectations. Just like any other technical analysis tool, is not capable of providing accurate signals 100% of the time. Thus, this forex indicator provides false signals occasionally. Its performance will vary significantly depending on market conditions. Feel free to develop your own trading system based around it. Don’t forget that we still have more great free forex MT4 indicators to download and try.
Download Free Forex MT4 MACD Colored Histogram Indicator
To download the MACD Colored Histogram Indicator for Metatrader 4 (MT4) for free just click the button below: