If you’re looking to enhance your trading strategy, the MACD (Moving Average Convergence Divergence) indicator is a must-have tool in your arsenal. It’s widely used among traders to identify potential buy and sell signals based on momentum shifts.
Understanding the Basics of MACD
The standard MACD indicator is calculated using the following formulas:
SIGNAL = SMA(MACD, 9),
In these calculations, the main MACD line is derived from the exponential moving average (EMA), while the signal line is based on the simple moving average (SMA). The applied price is generally the closing price.
Introducing MACD MA Price
Now, let’s talk about the MACD MA Price indicator. This enhanced version offers greater flexibility in your input parameters, allowing you to utilize various moving averages and a wide range of applied prices. This indicator is based on a MACD template that many traders are familiar with.
Key Formulas for MACD MA Price
With the added input parameters for the MACD MA Price, the formulas are as follows:
MACD = MACD_MA_method (Applied_price, 12) - MACD_MA_method (Applied_price, 26)
SIGNAL = Signal_MA_method (MACD, 9),
For those who wish to have the option of selecting different moving average modes in the calculations, there's also an additional version called MACD MA Price-2:
SIGNAL = Signal_MA_method (MACD, 9),
Input Parameters Explained
Here’s a quick rundown of the input parameters for the MACD MA methods:
- MACD_MA_method, MACD_MA_method_1, MACD_MA_method_2, and Signal_MA_method:
- 0 - Simple Moving Average
- 1 - Exponential Moving Average
- 2 - Smoothed Moving Average
- 3 - Linear Weighted Moving Average
- Applied_price:
- 0 - Close Price
- 1 - Open Price
- 2 - High Price
- 3 - Low Price
- 4 - Median Price (High + Low)/2
- 5 - Typical Price (High + Low + Close)/3
- 6 - Weighted Close Price (High + Low + Close + Close)/4
I’ve also crafted some additional modifications featuring a colored histogram based on your feedback. You can download them along with a detailed description of the input parameters in a zip file.
Related Posts
- Mastering the MACD Candle Indicator for MetaTrader 4
- Mastering MACD Overlay: A Guide for MetaTrader 5 Traders
- Hourly Buffers for Data Collection in MetaTrader 5: A Simple Guide
- Unlock Trading Insights with Volume Profile + Range v6.0 for MetaTrader 5
- Mastering the FE Fibonacci Expansion Indicator for MetaTrader 4