Although the macd indicator is found as the default indicator, today I will discuss a custom one which is a 2 line macd indicator for mt4. I will show how you can trade forex successfully using this indicator. Don’t worry; you will get this one free at the very bottom of my writing.
Moving Average Convergence Divergence (MACD)
Macd indicates the relationships between two moving averages of a currency pair or security’s price. Moving average convergence divergence or MACD is a trend following indicator which is found by default at any mt4 or mt5 platform.
Many technical analysts of the market observe the macd indicator very closely and relate the market according to the behavior of the macd. Like analysts take the speed of the macd as the signal whether the market is overbought or oversold.
First, try to find out the overall trend. Remember, in trading, always trend is your friend. If you go against the trend, then the market will punish you. And this strategy is no different.
Apply your own method to find the trend. You can use a trend line to find out the trend. If the trend is up, then only place buy trend, and if the market is in a downtrend, then only place sell trade.
After finding the trend, focus on the 2 line macd indicator. This 2 line macd indicator for mt4 produces sell and buy signals on EMA’s crossover.
How to buy
the blue line ema should cross above the red ema. The histogram should show positive values or green color.
How to sell
The blue ema should cross below the red ema. Thus, the histogram should show a negative value or red color.
you can close your trade manually when opposite signals happen. For example, if you are in a buy trade, if sell signals happen, close your buy trade. If you are in a sell trade, then if buy signals happen, close your sell trade. This is the only way you can place your stop loss and minimize the risk.
Always use 1:2 risk-reward. This means if you take 100 dollar risk, then place your take-profit at 200 dollar profit point. Remember, if you wish to become a successful trader in this industry, then proper money management is a must; if your strategy doesn’t produce a good risk-reward ratio, then never ever trade this market.
See how beautifully the price rises when the blue line crosses above the red line and the histogram holds positive values. This way, you can also set this nice indicator to your chart and trade according to the rules shown above.
How to install 2 line macd indicator for mt4
First, download the indicator from here. Then Copy and paste the indicator into the mql4 folder of the mt4 trading platform.
File > Open Data Folder > MQL4 > Indicators
Just paste here the indicator.
Then close the mt4 and reopen it.
Now go to the indicator option in the mt4 terminal. Go for the custom option then you will find macd histogram.
The final talk
2 line macd indicator for mt4 is an awesome tool if you use it properly. Keep in mind that this is also a tool like any other trading tool. So don’t over expect from these tools. This technical indicator will not make you rich overnight. But if you follow the proper money management rules. Follow all the trading rules I showed above and trade according to it; then, at the end of the month, you will be able to withdraw a handsome amount of money from your broker.
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