Initially, the use of MACD smooths out minor price fluctuations. Next, based on MACD data, Bollinger Bands are calculated, which are used to determine histogram reversals. Tracking histogram reversals provides the most complete identification of trend price movements: from the very beginning of their occurrence to their completion and the occurrence of a reverse movement.
The histogram crosses the upper border of the Bollinger Bands from bottom to top is marked with a green arrow pointing upward. The intersection of the lower border from top to bottom is marked with a red arrow pointing down. Immediately after the arrow, the MACD histogram turns bright. After the up arrow, the histogram is green, after the down arrow, it is red. Signal arrows indicate the predicted direction of price movement. If the histogram changes its direction, but does not cross the opposite border of the Bollinger Bands, it is painted in a dark neutral color (the same shade both when moving up and when moving down). If the histogram turns towards the main movement again, it turns bright again.
Bollinger Bands to determine the reversal of the histogram allows you to ignore its minor fluctuations, especially if this was preceded by a strong impulse change in the MACD. Thus, false trading signals are eliminated and the transaction is held until the maximum possible profit is extracted.
In the indicator properties window, you can enable / disable the zero line – for more visual control of reversals of the MACD histogram. To do this, it is also possible to switch the MACD display method – it can be displayed as a histogram, as with the default settings, and as a simple line.
Also in the properties window, the scanner is configured – a list of symbols is entered into a string variable and the monitored time frames are turned on / off. All specified symbols and selected timeframes are displayed in the table on the graphical indicator panel: symbols are in the table rows, timeframes are in the columns. The table cells display the latest trading signals for the corresponding symbols / timeframes and the number of bars that have passed since their appearance.
When the indicator starts, a message window opens with information about the latest signals for all tracked symbols and timeframes. Further, during the operation of the indicator, messages are opened immediately after the appearance of trading signals.
MT4 MACD + Bollinger Bands Indicator can primarily be used to determine the immediate moments of entering the market.
In this case, trades are opened using signal arrows. When the MACD line is above the Bollinger band, it is a signal to open a long position. When the MACD line is below the Bollinger band, it is a signal to open a short position.
On higher timeframes MT4 MACD + BB Indicator can be used as a trend indicator – to confirm the direction determined by a smaller timeframe. In this case, the trend and, accordingly, the preferred direction of trading is determined by the color of the histogram. A green histogram means an uptrend, a red one means a downtrend.
A dark histogram (neutral zone) means market consolidation; at these intervals it is possible to take profits by moving the stop loss once to the profit zone, activating the trailing stop (which implies waiting for the trend to continue), or simply closing the transaction if the trend is expected to end.
The dashboard shows information about the current status of detecting signals.
The dashboard is a table with tracked symbols in rows and timeframes in columns.
The cell of the asset / timeframe contains information about the direction of the deal (BUY or SELL) and the serial number of the bar (the number of bars back) on which the signal was detected.
When a signal is detected, the dashboard highlights the currency pair / timeframe cell with the color corresponding to the direction of the signal (green – BUY, red – SELL). The color of the cell changes the saturation of the main color depending on how far the distance of the bars from the last bar where the signal was detected increases.
When clicking on a cell where a signal appears, the chart instantly changes to the asset and timeframe on which the signal was detected, which allows you to quickly assess the market situation and make a decision to enter a trade.
The indicator has the following parameters:
assets – selection of assets to search for signals.
enable_M1 – enable_MN – include / exclude timeframes (from a minute to a month) to search for signals via them.
max_bars – the maximum number of bars back, by which the scanner will search for signals. The parameter limits the number of calculations to speed up the indicator.
enable_alert – the option enables / disables alerts.
enable_email – allows you to send email alerts.
enable_mobile – allows you to send alerts to your mobile device.
MACD and Bollinger Bands (BB) settings – individual settings for the MACD and Bollinger bands indicators.
We can also turn the indicator into an Expert Advisor (trading robot) with an extended set of custom functions (stop loss, take profit, trailing stop, risk management parameters, trading time limit, and others).
Request a free consultation from our team of professional programmers and find out the cost and timing of your project development.
Nordman Algorithms is not liable for any risk that you face using the software. Please, use the software on your own responsibility. The software is coded in accordance with a common known concept and Nordman Algorithms does not guarantee accuracy or trading performance of the software signals.
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