MACD True Alerts Indicator
MACD True Alerts is an enhanced for of traditional MACD indicator. It helps to recognize trend reversals. You can use it as a sole trading strategy.
CATEGORIES: SIGNAL, OSCILLATOR, MT5, INFORMATIONAL
Updated on: 19.10.2023
The MACD True Alerts indicator is an impulse trend following indicator that displays the relationship between two MAs (moving averages).
Traders can use the MACD (moving averages convergence divergence) True Alerts indicator in conjunction with any forex trading system or strategy to confirm entry and exit points.
In this guide, we will analyze the nuances and features of trading using the MACD True Alerts indicator.
What is the MACD True Alerts indicator?
Gerald Appel developed the MACD indicator in the late 1970s. The MACD indicator is designed to display changes in the strength, momentum and direction of the current market.
To predict MACD crossovers, Thomas Asprey added a histogram or “histogram” to the indicator in 1986. For technical traders using the MACD indicator, this has become the industry standard.
However, the default MACD indicator in MetaTrader 5 does not use the classic Appell and Asprey formula. This can be confusing for traders, especially if they are not familiar with the forex market.
Fortunately, the indicator solves this problem and uses the traditional Appell and Asprey formula.
It takes part of the traditional MACD and adds an additional signal line. This signal line helps determine the overall price trend. In addition, it shows signals with arrows or other symbols when the signal and zero lines cross or when the oscillator rises.
How to use the MACD True Alerts indicator?
Many traders combine two EMAs in their trading. Usually there is a fast one and a slow one. Using two EMAs allows you to improve overall trend identification or even signal entry or exit points.
The MACD expands on this principle by keeping the slow and fast lines. However, it uses a signal line.
The intersection of the fast and slow lines serves as a signal for entry and exit. For example, if you want to go long, you wait for the fast line to move lower and then move to the top of the slow line. From there you can open a buy position.
Wait for the fast queue to go to the bottom side before exiting. This is probably the easiest way to trade the indicator.
You should look at the MACD True Alerts bars to better understand price momentum.
Price has more momentum when the bar is longer. What is unusual is that you can compare the momentum of the current bar with the momentum of the previous bar or bars to easily determine the strength or weakness of the momentum.
Conclusion
The MACD True Alerts indicator for MT5 works similarly to the traditional MACD; however, it provides you with an additional 9-period signal line. This can help you analyze the general direction of the price.
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