Forex trading. Indicators, Expert Advisors, Trading Systems
       

How to trade with FXB MACD indicator for Metatrader 4

1. Install the indicator, attach it to the chart of instrument you are going to trade. Paste the Activation Key into the FXB_MACD_IND.INI file to unlock the indicator.
2. Estimate market mode by using the MA21 line position (yellow line) and MACD bars polarity in H4 chart.

What type of market I am in?

Ranging market

MA has no definite slope, it is mostly horizontal and frequently crosses the price line from top and bottom. MACD bars go from negative to positive values and vice versa

Trade both bullish and bearish signals, especially peaks (tops) and troughs (bottoms) as they provide maximum profit.

Uptrend

MA is mostly below the price line and  MACD bars  are positive (above zero line).

Accept only the bullish signals i.e. troughs/bottoms (TR, BT) and Upper Valleys (UV) but ignore the rest. When the trend is over the daily MACD bars cross a zero line and become negative. This is a time to revise/change direction.

Downtrend

MA21 is mostly above the price line while MACD bars are negative (below zero line).

Trade the peaks/tops (PK, TP) and Down Valleys (DV) signal but ignore all others. A change of daily MACD bars polarity from negative to positive is a signal to revise/change direction.
* The above screenshots produced by ForexBarometer Pro program: TP=top, BT= bottom, UV= upper valley, DV= down valley. Your MT4 creates the similar charts.
3. Turn off the bullish or bearish indicator signals unless you have enough knowledge and experience to trade against the trend.

April-May 2007 results for EUR/USD
As you may see there were 9 bearish signals, 8 of them were true and at least 6 produced the profit of 30-50 pips each. Five short signlas from MACD occured when the price hit a top of trading channel.

Some observations

  • The support and resistence levels have properties of the magnet, i.e. to attract or repell a price. If you have a buy signal when price hovers over support (10-20 pips, depends on currency), be sure it will hit a support before moving upwards.
  • The worse thing you can do after getting a wrong direction is a tight stop loss. Price always reverses after hit your SL.
  • The low activity is a signal of expiration. If you accepted a signal and opened a position but price doesn't move in you favor during 2-4 H4 bars, be cautious, the reversal
  • Though the market is never exclusively bullish, bearish or ranging but a combination of those, trading against the main trend is very risky, especially for beginner. Use the trend corrections for entering the trade in main trend direction but not for making money.
  • Set stop-loss immediately after opening a position and don't move it away if you are losing money. The price always reverses if you accept the loss and moves against you if you keep the losing position opened.
         

© 1996-2007 ForexBarometer