The Reverse MACD indicator is a game-changer for traders looking to enhance their analysis on MetaTrader 5. This tool calculates the expected price level for the next bar where the MACD and Signal lines of the traditional MACD indicator would intersect. It was first highlighted in Johnny Doug's insightful article, "Reversing MACD: The Sequel," published in S & C magazine back in December 2013.
This indicator is particularly handy for estimating the prices of pending orders, giving you a strategic edge in your trading decisions.
Here’s a quick rundown of the five input parameters you’ll encounter:
- MACD Fast MA period - This setting defines the fast moving average period for the MACD indicator.
- MACD Slow MA period - This parameter sets the slow moving average period.
- MACD Signal line period - Here, you can adjust the signal line period for the MACD.
- Method - Choose how the MACD is calculated:
- Simple - SMA (Simple Moving Average)
- Exponential - EMA (Exponential Moving Average)
- Applied price - Select the price type for calculations.
Fig 1. Reverse MACD
Fig. 2. Reverse MACD compared to standard MACD with similar settings
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