MACD Momentum Indicator
Platform: MT4 Type: Momentum Last update: November 9, 2024The MACD Momentum Indicator for MT4 was developed as a substitute for the conventional MACD, since it tends to exhibit delayed signals when applied to weekly data.
To address this issue, Tom Aspray (the creator of this indicator) conducted extensive research to enhance the MACD’s performance. He experimented with different combinations of inputs for the three exponential moving averages and eventually discovered a favorable solution. By incorporating a 10-day momentum, smoothed over a 3-day period, in the form of a histogram (MACD-H), he achieved highly satisfactory outcomes.
Taking a look at the MACD momentum
This indicator closely tracks the variance between simple and exponential moving averages of the price. It utilizes the MACD histogram bar to display the disparity between these moving averages. The positive and negative values of the histogram bar serve as determinants of price momentum.
MACD, being a momentum indicator, garners admiration from a vast number of active traders, ranging from novices to seasoned professionals. Its popularity as a MetaTrader indicator stems from its easily understandable signals, uncomplicated trading rules, and straightforward application.
Experts in the market consider the MACD Momentum as an excellent tool for forex scalping, intraday trading, and long-term price projections.
MACD momentum trading suggestions
In the chart above, the red-colored slope corresponds to a 9-day Signal Simple Moving Average (SMA). Conversely, the green and yellow slopes represent the 12-day and 26-day Exponential Moving Averages (EMA) respectively.
During a bullish momentum, the MACD histogram bar indicates positivity, and the fast EMA rises above the signal SMA. To further validate this trend, ensure that the slow EMA moves below all the moving averages of the indicator.
For a bearish momentum confirmation, the fast EMA should fall below both the signal SMA and the slow EMA. Additionally, the MACD histogram bars will display negativity, signaling a bearish momentum alert.
Summary
The MACD Momentum indicator for MetaTrader 4 stands out as a top-tier momentum alert indicator, renowned for its effectiveness. It seamlessly integrates with charts of various timeframes and proves valuable in both swing trading and trend-following strategies. Furthermore, you can incorporate this indicator into any MT4 trading approach to elevate your trading performance. The indicator is available for free download and can be effortlessly installed.
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