BB MACD Indicator for MT4

0
1270
BB MACD Indicator for MT4

Introduction to the BB MACD Indicator

The MACD Indicator is one of the most effective momentum oscillators. Its oscillations are very effective for identifying potential trend reversals. However, it is quite difficult to assess reversals from overbought and oversold levels since the MACD oscillates on an open range, which means there is no hard level or marker which would qualify overbought or oversold markets. The BB MACD Indicator was developed to address this and help traders identify potential reversals coming from overbought and oversold market conditions.

What is the BB MACD Indicator?

The BB MACD Indicator is a momentum indicator which is based on the Moving Average Convergence and Divergence (MACD) with added elements of the Bollinger Bands.

This indicator is an oscillator which plots dots that oscillate around a midlevel which is zero.

Positive dots indicate a bullish general trend direction, while negative dots indicate a bearish general trend direction.

The color of the dots also indicates the direction of the momentum. Lime dots indicate a bullish momentum and magenta dots indicate a bearish momentum.

This indicator also plots a line above and below the dots which form a band-like structure which envelope the dots. The blue upper line represents the overbought area, while the red lower line represents the oversold area.

BB MACD Indicator for MT4

How the BB MACD Indicator Works?

The BB MACD Indicator has an algorithm which calculates underlying MACD value. It then plots the MACD values as the oscillator dots. It also compares the value of the current dot with its preceding dot. It plots a lime dot if it has a higher value than the prior dot, and a magenta dot if it has a lower value compared to the prior dot. It also calculates for the values of the upper and lower lines using a formula which is similar to the Bollinger Bands applied on the oscillator dots, although the indicator is preset to use 10-dot average with a standard deviation of 2.5.

How to use the BB MACD Indicator for MT4

The BB MACD Indicator has input variables which can be modified within its indicator settings.

How the BB MACD Indicator Works

“FastLen” and “SlowLen” refers to the number of periods used to calculate for the moving average values of the MACD formula.

“Length” refers to the number of periods used for the Bollinger Band calculation derived from the MACD values.

“StdDv” refers to the standard deviation applied on the Bollinger Band calculation of the MACD values.

Buy Trade Setup

When to Enter?

Allow the dots to touch the red lower line then open a buy order if the dots change to lime.

When to Exit?

Close the trade as soon as the dots change to magenta.

How to use the BB MACD Indicator for MT4 - Buy Trade

Sell Trade Setup

When to Enter?

Allow the dots to touch the blue upper line then open a sell order if the dots change to magenta.

When to Exit?

Close the trade as soon as the dots change to lime.

How to use the BB MACD Indicator for MT4 - Sell Trade

Conclusion

The BB MACD Indicator is an excellent momentum based oscillator which can help traders identify momentum reversals coming from overbought and oversold market levels. The weakness of the classic MACD is that it is difficult to assess if the MACD values are overbought or oversold since the oscillations are variable. The addition of the Bollinger Bands applied on the MACD dots help traders objectively identify markets that are oversold or overbought.

Recommended MT4/MT5 Brokers

XM Broker

  • Free $50 To Start Trading Instantly! (Withdraw-able Profit)
  • Deposit Bonus up to $5,000
  • Unlimited Loyalty Program
  • Award Winning Forex Broker
  • Additional Exclusive Bonuses Throughout The Year

XM broker

>> Sign Up for XM Broker Account here <<

FBS Broker

  • Trade 100 Bonus: Free $100 to kickstart your trading journey!
  • 100% Deposit Bonus: Double your deposit up to $10,000 and trade with enhanced capital.
  • Leverage up to 1:3000: Maximizing potential profits with one of the highest leverage options available.
  • ‘Best Customer Service Broker Asia’ Award: Recognized excellence in customer support and service.
  • Seasonal Promotions: Enjoy a variety of exclusive bonuses and promotional offers all year round.

fbs broker

>> Sign Up for FBS Broker Account here <<

 

Upgrade

(Free MT4 Indicators Download)

Click here below to download:

BB MACD Indicator for MT4

 

Get Smarter About Forex Trading Using Indicators

Join 100,000+ subscribers and get our 5 min daily newsletter on what matters in forex.

We do not sell or share your information with anyone.

LEAVE A REPLY

Please enter your comment!
Please enter your name here