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Thread: Indicator MACD

  1. #1
    Trader Azis Muslim's Avatar
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    Indicator MACD

    Hello guys

    First thing first, I would like to thank to all kind Moderators who allow and give me an opportunity to make a review about an indicator. And in this thread, I want to share an easy-to-understand things about MACD indicator. Well, lets get started.

    Description of MACD.

    MACD is the abbreviation of Moving Average Convergence Divergence. MACD indicator was created by Gerrald Appel. MACD is similar to Moving Average indicator in many things and has same formula in calculating the market’s movement. But MACD has bit more advantages, they are Convergence and Divergence pattern. This will make MACD more accurate than a simple Moving Average.

    Features and principles of MACD.

    MACD is divided into 3 parts, they are trigger line, center line, and MACD line. Here I only explain the 2 parts to analyze market movement and see the average movement in the charts, and also to see deviations. Once we see deviations, that’s the moment for us to enter the market. When it happened, market will move reversed in matter of time.

    And people start questioning this, what is deviation in MACD? Does it really useful or what? Well, let me explain it. Deviation in MACD is divided into 2 parts, they are Convergence and Divergence.

    1. Convergence
    Convergence is a moment when the chart moved lower but the indicator showed higher. When convergence happened, we’ll see that the chart move reverse and go up. So in this case, we enter the market by going long (buy).

    Rules:
    Simply open buy position once the center line is higher than the MACD line after convergence happen. See the screenshot below:


    Take profit: Immediately close the positions once the indicator start to change the pattern from convergence to divergence. Otherwise, if you wants more profit, simply set a trailing stop or set the stop loss level in profit which is above the buy positions.

    2. Divergence
    Divergence is a moment when the chart moved higher but the indicator showed lower. When divergence happened, we’ll see that the chart move reverse and go down. Different from another pattern, this time we enter the market by placing sell.

    Rules:
    The entry point is when the center line is lower than the MACD line after divergence happen. See the screenshot below:


    Take profit: Just like the previous rules, immediately close the positions once the indicator start to change the pattern from divergence to convergence. Same suggestions, if you wants more profit, simply set a trailing stop or set the stop loss level in profit which is below the sell positions.

    Settings of MACD.

    We should have known that every indicator has many settings which make it more useful to analyze market. In this thread, I will explain the settings of MACD. Please take a look at the screenshots below.


    I just leave all the settings in default without any changes. So, I keep the Fast EMA* at 12, Slow EMA at 26, MACD SMA** at 9, Apply to Close remains the same, and leave the rest blank. (EMA* means Exponential Moving Average and SMA** means Simple Moving Average).

    And we can also see the rest of the tab in MACD setting, there are Parameters (which was described above), Colors, Levels, and Visualization. In Colors tab, we can choose which colors we want to use in our MACD. There are only 2 colors so choose wisely. In Levels tab, we can also change the line’s color and which type of line we want to use in our MACD. And the last tab is Visualizations. It’s used to apply the indicator in which time frame we want to use. I personally suggest to leave it in default and choose click the All time frames.


    My personal opinion and recommendations of MACD.

    MACD is a perfect indicator for those who wants to trade in long term or just simply following the market trends. It helps traders to find the perfect moment to enter the market by viewing and analyzing both convergence and divergence patterns. Once we see one of them (convergence and divergence) surely we will get a lot of profits. But, let me give you some suggestions and recommendations according to this indicator.

    1. MACD is a perfect indicator for long term trader or swing trader which follows trend to trade. Not suggested to those who trade as scalpers.
    2. MACD requires higher time frame such as hourly. Using lower time frames will decrease its accuracy to determine both convergence and divergence.
    3. MACD requires more time to show convergence or divergence. It takes a bit of patience.
    4. Don't fall to false patterns. Read, analyze, and understand this indicator first before apply it in live markets.
    5. Make sure you see one of those 2 patterns before entering the market.
    6. Trade with your own risk. If you lose when you use this indicator, don't blame it. Try to learn and understand it more.

    Conclusions.

    MACD is just an indicator and has same functions like the others, to help traders make money and analyze market. It's just a tool full of settings and adjustments. So, if we make mistakes from it, we can't blame it. It means we need to learn about it more. Understanding an indicator takes some time to focus and discipline. It's not good to learn from one thing to others at the same time because it will give us nothing but only a confusion. I personally choose this indicator as my review in this contest because it's the only indicator that easy to understand for me.

    Finally, we come to the end of this thread. Please, leave all your advice, critics, suggestions, or anything here. I will appreciate for every words you write in here. First to last, thank you so much for reading my review of MACD indicator.

    Good day and happy trading guys

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  2. #11
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    MADC Is one indicator that I have never gotten very well how to trade with, this is one of the best individual indictors that you can used when it's something that a bigginer that can used easyly trading becomes more soffitsicated if you add other indicator to know well the direction of the that if you have more information the better analysis you will get from that particular pairs that you trading with

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  3. #12
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    i like this indicator because it is good and strong for trading, and many traders use it and their decision of trading depends on it, it is good for trading and getting good results and help the trader to make good profits, this is good for confirmation of the signals of trading and help the trader to choose a good positions of trading and making of money.

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  4. #13
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    I didn't know what that MADC has the three parts I would like to personally thank the author of the thread. I know that is one of the used indicators of the the platform but I didn't know that It has the nitty-gritty of the indicator I have some sometime used this kind of details I just add the indicator and just look at one or two things and that's all

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  5. #14
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    A MADC is a very important trading indicator and especially when you have a certain market that may a little bit of support by the trading of forex with the use of a good cci channel there is a lot of good chances we have seen that develop the right forms of choices

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  6. #15
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    MACD is ne of the best indicatrs and can be used alone or with another indicators, it works well with the moving average and bollinger bands and also with the other indicators, there are many strategies depends on that indicator with the combination of the other indicatrs and give good results and help the trader to make good profits from the market.

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  7. #16
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    MACD fact that I am one of the best and they are the simplest indicators that help stores in the analysis in the forex market but I personally used it to trade only Real Scalping and small, such as the 5-minute Alfrem minutes and is very useful to me on the FPS Minibuses and I would recommend everyone experience shook index

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  8. #17
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    MACD indicator is very good for trading. MACD means "Moving Average Convergence Divergence". The indicator is very helpful for traders. The indicator's calculation just from zero line from scale.I am finding hopeful result from MACD indicator.

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  9. #18
    Trader YoyO_o's Avatar
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    i completely detest the use of the indicator because when you use the indicator for trading you are only going to reduce your own ability to trade the forex market as a professional because the forex market makes a lot of sense when you trade without the use of any indicator because you will be in full control of the forex market like that.

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  10. #19
    Trader WhoAini's Avatar
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    [lang=id]I previously used as an ingredient MACD Indicator my bro in market analysis, using the MACD indicator I can perform analysis in H1 with so I'll be a good chance many weeks to open a position,
    settings I use that time was 20,40,10, but now I am more often trade only use candelstic A good time to open a position or when market analysis, to this day I have no use indicators at all bro[/lang]

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  11. #20
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    Thanks my mate. MACD indicator is very simple and easy to understand. MACD result is very good in all time frame in all currency pairs. We can use and trade in all pairs by using simple MACD indicators.Some traders make manual MACD parameters for trade and some traders use double MACD for successful trade.

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