If you already know about the features of the MACD Indicator and how effective it can be in forex trading, you will certainly appreciate these versions of the same tool. As you already know, MACD comes with MT4 by default, but it’s only pltted in one colour. Colored MACD indicators keep the same easy understandable interface but add some more readability due to its great visual graphic.
Main differences with the standard MACD indicator:
- It uses set values as follows: Fast EMA (5), Slow EMA (13), Signal EMA (1)
- The color of the bars changes according to the direction: from uptrend to downtrend and vice versa.
Another very useful feature of the Colored MACD Indicator is the plotted number to the right of the histogram specifying how many pips left before the MACD bar to change color.
Trading with MACD Color
Signals will be plotted on MACD chart as follows:
• RT -> round high
• RB -> round low
• VT -> v-high
• VB -> v-low
• ZB -> zero bounce
• TC -> trend continuation
The larger is the size of the letters, the more powerful is the signal.
Note: signals provided by Colored MACD indicator will not always be perfect precise. Your personal evaluation is still needed to decide when it’s the right point to enter/quit the market.
Sound alert and e-mail alert are included. Also there are some additional alert options:
• Alert_on – chose the kind of signals to activate alert. A combination of signals can be chosen separated by commas (i.e. RT,VT,VB) or chose “ANY” to activate alert for all signals.
• EMail_Alert – chose “true” to e-mail alert. Setup the email address in Tools/Options/Email.
• Max_Alerts – number of alerts to send on every new signal.
• Alert_Before_Minutes – send alert before bar is completed in order to alert in advance. Note: as the bar is still forming, the signal may appear or disappear intermittently.
Colored MACD Indicator Settings
Levels must be set depending on timeframe:
- Original settings are 15,30,45 and -15,-30,-45. These will show on H1 and H4 charts.
- D1 and higher timeframes will be set on: 30,60,90 and -30,-60,-90
- All chart below H1 will show these levels 5,10,15 and -5,-10,-15.
The picture below shows another variation of the Colored MACD. As you can see the histogram changes color according to 4 different parameters: if it’s going up/down or if it’s above/below the 0 line.