Traditional MACD Indicator

The Traditional MACD Indicator is a simple MT4 indicator that tells about the trend’s direction and finds bullish and bearish divergences. The indicator is an upgrade to the traditional MCD indicator, which only draws a histogram and a signal line below the chart. The Traditional MACD Indicator uses EMA rather than SMA Averages. In addition, it finds classic/hidden bullish and bearish divergences. The Traditional MACD Indicator works best on all timeframes, but traders should apply it on higher timeframes to reduce any false signals. Traditional MACD Indicator BUY/SELL signals The above GBP/USD H4 chart shows the indicator on the chart. There are two ways to use the indicator. Traders can look at the MACD histogram and a signal line, or they can locate bullish and bearish divergences. When the signal line is below the histogram bars, it indicates a strong downtrend. Conversely, if the signal line goes above the histogram bars, it indicates an uptrend. The other method to use the Traditional MACD Indicator is to find divergences. The indicator pinpoints two types of divergences; classic and hidden. A bullish divergence indicates a strong uptrend reversal. It happens when the price makes a higher low, and the oscillator creates a lower low. Conversely, a bearish divergence signifies and strong downtrend. It occurs when the price makes a lower high, and the oscillator creates a higher high. The divergences and the MACD signal lines confirm the direction of the trend. Conclusion The Traditional MACD Indicator plots the MACD on the chart along with bullish and bearish divergences. It acts signal confirmation so traders can take their positions accordingly.  Besides, you can download the indicator for free on our website.