BEST Forex Trend-Following Momentum indicator and Trading System. High Accuracy Forex Trading Strategy Based on the MACD and Parabolic SAR filter Indicator. The MACD histogram is one of the main tools traders use to gauge momentum, because it gives an intuitive visual representation of the speed of price movement.
For this reason, the MACD is commonly used to measure the strength of a price move rather than the direction or trend of a currency.
Moving average convergence divergence (MACD) is a trend-following momentum indicator that shows the relationship between two moving averages of prices.
The MACD is calculated by subtracting the 26-day exponential moving average (EMA) from the 12-day EMA. A nine-day EMA of the MACD, called the “signal line“, is then plotted on top of the MACD, functioning as a trigger for buy and sell signals.
The MACD generates a bullish signal when it moves above its own nine-day EMA, and it sends a sell sign when it moves below its nine-day EMA.
ForexWOT MACD Parabolic SAR Trading Rules
ForexWOT MACD Parabolic SAR Trading System is a forex trading strategy based on the Moving average convergence divergence (MACD), Parabolic SAR, and high accuracy trend filter indicators.
- Best Time Frame : 1 H or higher
- Recommended Markets : Forex, Metalas, CFD, Futures, Indicies.
Metatrader Trading Indicators
- MACD alert (10, 20, 5)
- Parabolic Sar (0.07 -0.3)
- In Marrows (3,3,3,3,)
- Signal bars
- Non Lag Ma (10 periods)
- Histogram indicator (10 period)
- Candle close above the Green NonLAG MA, Tenkan-Sen, and EMA 8
- In Marrows buy arrow
- Parabolic Sar below the candles
- Histogram blue bar
- MACD alert blue line
- Market Emosions green bars
- Candle close below the Green NonLAG MA, Tenkan-Sen, and EMA 8
- In Marrows sell arrow
- Parabolic Sar above the the candles
- Histogram red bar
- MACD alert red line
- Market Emosions red bars
- Exit position is discretionary and depends by time frame and currency pairs
- This forex system is very flexible for more interpretations
- Initial stop loss on the previous swing
The disadvantages of the MACD indicator
It is no doubt that MACD is not a perfect indicator and has its own disadvantages:
- Many false signals
- The linear MACD is late as far as trend signals are concerned
- No universal input settings. The more detailed the information is the better signals it depicts.
When traders work in the forex currency exchange market, indicators are really good assistants as they help to follow the trends and make profitable deals. So, the use of indicators and advisors is a step towards experience and in the end to success.