NinjaTrader MACD + RSI Indicator is based on a joint analysis of two technical analysis indicators, each of which operates on different principles. Combining indicators into a single system makes them useful for analyzing and making decisions about opening trades.
The MACD indicator is a momentum oscillator based on a moving average, primarily used for trend analysis. RSI also measures momentum, but reflects that momentum through a different analytical approach and is used primarily to identify overbought / oversold conditions in a market.
As MACD and RSI are momentum indicators that assess market data and conditions differently, combining them can offer a more accurate evaluation of potential trade opportunities, enhancing traders’ confidence in their decisions.
Using MACD and RSI together provides several advantages:
To avoid missing profitable opportunities for opening trades, the indicator offers settings for various types of alerts. When a signal appears on the chart, the indicator can notify the trader in any of three ways, which can be turned on/off independently of each other: sound (with the ability to select a sound file), by email, and a pop-up message.
NinjaTrader MACD + RSI Indicator first identifies when the RSI indicator enters the overbought / oversold zone and then waits for a confirmation signal from the MACD indicator over several bars. If RSI is in the oversold zone, that is, it has a value less than 30, then the main MACD line, being below the zero level, crosses the signal line from bottom to top, then a buy signal is displayed on the chart. If the RSI is in the overbought zone (above 70), then the main MACD line, being above the zero level, crosses the signal line from top to bottom, then a sell signal is displayed.
A sell signal appears on the chart exactly according to the MACD readings – when the main line crosses the signal line from top to bottom. There may be cases where the main MACD line on the next bar rises again above the signal line, and two bars later crosses down again, but in this case a repeat signal does not occur.
For a repeat sell signal to occur, it is necessary that the main MACD line drops below zero, then rises above the signal line, and only after that the signal line crosses upward, and the RSI condition must still be met. If the conditions for the RSI are no longer met, it is necessary for its readings to drop to 50, then it rises to the overbought zone, and after that the main and MACD signal lines cross again from top to bottom.
Similarly, with buy signals – for a repeat signal to occur, the MACD indicator must rise above zero, then fall below the signal line and again cross the signal line from bottom to top. In this case, the conditions for RSI must remain met, or the RSI indicator must rise above 50, fall into the oversold zone, and after that there must be a new intersection of the main and MACD signal lines from bottom to top.
The indicator has the following parameters:
Alerts – setting up various types of alerts.
MACD – individual setting up key MACD parameters.
RSI – individual setting up key RSI parameters.
Signal parameters – setting the values of overbought / oversold RSI levels.
We can also turn the indicator into an Automated Trading Strategy 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.