Forex Trading for Beginners – How to use Adaptive MACD Indicator and MTF Moving Average Indicator. This trading system is very easy to use and anyone can use it because it does not require any additional knowledge.
Moving averages are perhaps the most commonly used technical indicators in forex trading. MAs are used primarily as trend indicators and also identify support and resistance levels.
Moving average convergence divergence (MACD), invented in 1979 by Gerald Appeal, is one of the most popular technical indicators in trading. The MACD is appreciated by traders the world over for its simplicity and flexibility because it can be used either as a trend or momentum indicator.
Adaptive MACD Indicator
This version is specific because it is two times adaptive.
First, it is using Hilbert transform for phase accumulation to calculate MACD fast and slow periods, and that way it is having the basic MACD calculation adaptive (the interesting part is that the fast and the slow periods are not changed proportionally – they are having a sort of “a life on their own” and each is adapting to market conditions on its own) which help in a lt of cases when the market enters volatile periods.
Second, the usual criteria for MACD (signal line cross or zero line cross) is changed in this one and what used to be a zero line cross is changed to be a dynamic (also adaptive) levels cross (levels can be floating or quantile levels).
For the sake of having something classical too, slope can be used for short term trend./momentum determination too.
“ Indicator is already multi time frame ” with all the usual set of alerts built in and, in order to help with possible signals, on chart arrows can be used (handled by the indicator itself).
- Adaptive MACD green Arrow
- Blue line Adaptive MACD
- MTF Moving Average Upward (Price above MTF Moving Average)
- Adaptive MACD red Arrow
- Red line Adaptive MACD
- MTF Moving Average Downward (Price below MTF Moving Average)
Only take trade signals in “the same direction as the trend” shown by the 10-period MTF MA on the hourly chart. As long as the price is above the 10-period MTF MA on the hourly chart, then only buy trade signals are taken. If the price is below the 10-period MTF MA, only sell trades are entered.