MACD Divergence MT4 Indicator - Free MT4 Indicator

MACD Divergence MT4 Indicator – Free MT4 Indicator

You are just simply going to love the MACD Divergence MT4 Indicator. As this strategy is a leading strategy, you will have early warning on was is about to happen. The MACD or the Moving Average Convergence Divergence which is one of the simplest and most effective momentum indicator available. Unlike other indicators the MACD indicator beside giving you clues about the momentum it also provides trend following insights. Most novice traders don’t fully understand the MACD indicator because it’s constructed with several components that interact with one another that’s why by using the MACD Divergence MT4 indicator which will automatically spot and plot the divergence between price and MACD and you will have a clear and better representation of the divergence on your charts. To further your understand on this powerful strategy, you can learn more about MACD Divergence here.

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The MACD Divergence MT4 Indicator

This indicator will automatically detect the divergence between the price and the MACD indicator and subsequently will plot a divergence line both on the price chart as well as on the MACD indicator at the time when it’s spotted. If we have bullish divergence this will be plotted with a blue line (as per default settings) while the bearish divergence will be plotted with a red line. Not just that it will plot for you the MACD divergence, but at the same time, it will generate buy and sell signals by displaying blue and red arrows on your chart.

MACD Divergence MT4 Indicator - a powerful leading indicatorMACD Divergence MT4 Indicator – a Powerful Leading Indicator

A bullish divergence between the MACD indicator and the price materializes when a new high is established above the previous high and a corresponding MACD value is lower than the previous one. The same is true in reverse for a bearish divergence between the MACD indicator and the price, which materialize when a new low is established below the previous low and a corresponding MACD value is higher than the previous one. Subsequently, a buy signal is generated after a bullish divergence and a sell signal after a bearish divergence.

 


MACD Divergence MT4 Indicator Settings

The MACD indicator has different built-in functions that can help you customize the indicator based on your own needs. Going forward, we’re going to look at each of the inputs and give you a short explanation of what it does.

MACD Divergence MT4 Indicator SettingsMACD Divergence MT4 Indicator – Settings

Inputs:

  • timeframe= Time frame; You need to have the zero value to show on all time frame otherwise if for example you want to show only on the 1h chart, you put as an input 60;
  • nCheckBars= Number of bars to check divergence;
  • macd_fast (the faster moving average); macd_slow (the slow MA); macd_signal(the signal line) = This are the standard MACD settings;
  • div_mode= The indicator can be used in three different modes:

1. Main Mode if selected div_mode=0; In this trading mode the divergence will be calculated using the slow MA and faster MA of the MACD indicator

MACD Divergence MT4 Indicator - Advanced Settings
MACD Divergence MT4 Indicator – Advanced Settings

2. Signal mode if selected div_mode=1; In this trading mode the MACD indicator will only generate signals when there is a crossover between the slow MA and faster MA of the MACD indicator;

MACD Divergence MT4 Indicator - MA Crossover ModeMACD Divergence MT4 Indicator – Advanced Settings 2

3. OsMA mode if selected div_mode=2; In this trading mode the divergence will be calculated using the MACD histogram;

MACD Divergence MT4 Indicator - Advanced Settings 2MACD Divergence MT4 Indicator – Advanced Settings 3

  • Div_oscErr= Allowed error long divergence line (oscilator);
  • Div_priceErr= Allowed error long divergence line (price);
  • bAlertDiv= Sound alert for divergence;
  • bAlertCross= Sound alert for MACD MA crossover;
  • bAlertDialog= Display dialog on alert;
  • bDrawObj= Draw lines on chart/window;
  • nMaxBars= Maximum number of bars to calculate;

MACD Divergence MT4 Indicator – Trading Rules

Because of its tendency to generate a lot of false signals and in order to filter many of the bad trades, we’re going to use the indicator in div_mode=0 where the divergence will be calculated based on the slow MA and faster MA of the MACD indicator. The strategy’s rules are straight forward as the signals will be generated by the indicator itself, we only need to define our stop loss and take profit rules:

  • Bearish Divergence = Short signal with Stop Loss above the first swing high and take profit at MACD crossover;
  • Bullish Divergence= Long Signal with Stop Loss below the first swing low and take profit at MACD crossover;

MACD Divergence MT4 Indicator - Trading Rules
MACD Divergence MT4 Indicator – Trading Rules

 

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Time Frames
Technically speaking, you can use this indicator for all time frames. However, the shorter the time frame, you will see more fluctuation and possibly more whipsaw which may cause small losses that can eat up your portfolio quickly. We recommend that you use higher time frames like the 4H for better consistency.


MACD Divergence MT4 Indicator – Download

We have provided this powerful reversal indicator to you at no cost. We humbly request for your help to spread the word by sharing on one of the social platforms below. To unlock the download link, you just need to share this page to help us achieve our goal of helping more traders out there.

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Leave us a comment below to let us know your thoughts on this indicator. If you like this indicator, you might like see other indicators that we have carefully selected that will help you in your trading journey.

Visit our Free MT4 Indicator Download page. And if you can, you really should invest in a proven MT4 Expert Advisor to help you generate some profit on full auto-pilot.

We highly recommend this powerful MT4 Expert Advisor.

We hope you have enjoyed this post as much as we have creating it. Good luck and thank you for your readership.


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