The MACD Divergence MT5 indicator draws trend lines on the indicator and the price chart. Additionally, it draws bullish and bearish arrows to provide buy and sell forex trading signals.
Features of MACD Divergence MT5 Indicator
The indicator draws green trend lines in a bullish trend and red lines during a bearish market trend. Moreover, it draws a green up arrow to indicate a buy signal and a red down arrow for a sell signal.
Generally, MACD – Moving average convergence and divergence indicator provides profitable divergence and convergence based forex trading signals.
The trading strategy is to enter the markets upon the arrow trading signal. In a bullish signal, traders can enter the market with a buy trade and place a stop loss below the previous swing low. Divergence does not provide target for booking profits. So, traders can exit with a good risk-reward ratio.
Traders can follow a similar trading strategy in a bearish signal to enter and exit a sell position.
Though divergence and convergence is a good trading strategy, they need additional confirmation. So, for best results forex technical traders should use price action before entering a trade.
Benefits of MACD Divergence MT5 Indicator
The MACD is simple and easy to understand, however new forex traders should understand the concept of divergence and convergence before using this indicator.
This indicator works well in all intraday chart time frames as well as the daily, weekly and monthly charts. So, it is suitable for short and long-term forex traders. Moreover, traders can incorporate this indicator in automated trading strategies.
Generally, divergence trading signals provide a good risk reward ratio and are beneficial to traders.
Indicator Settings Description
fastEMA:, slowEMA:, signalSMA: Input for EMA indicator calculation.
drawIndicatorTrendLines:, drawPriceTrendLines: Displays the trend lines on price chart and indicator window.
displayAlert: Enables alerts.
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