Author: mandorr
The Ticker MACD is an insightful indicator for traders using MetaTrader 4. It features a main line, which represents the difference between the fast and slow Exponential Moving Averages (EMAs) applied to the Ticker line, and a signal line derived from the Simple Moving Average (SMA) of the main line.
In the Ticker MACD indicator, the line labeled with index 0 (№0 in the "Colors" tab) is the main line, while the line with index 1 (№1 in the "Colors" tab) represents the signal line. Notably, the signal line begins to plot after a specified number of bars defined by PeriodSignal following the main line.
It's essential to understand that the standard values for this indicator typically only emerge after a minimum number of bars, specifically the value set by PeriodSlow or even more. This delay is due to the calculation method of the EMA values employed in the MACD formula, which uses a recursive calculation: X[t+1]=X[t]+K*(Price[t+1]-X[t]). The initial value for both EMAs is set to the current price: X[0]=Price[0]. Consequently, EMAs with the same period but different starting points will yield different values at any given time. However, over time, these values will converge and become nearly identical. In typical charts, this convergence may not be apparent due to the high number of bars in the window, but with the ticker version, it's crucial to wait for a sufficient number of bars to accumulate.
Default settings for the classic indicator: 12, 26, 9. Traders who are interested are encouraged to experiment with these parameters to find the optimal rules for utilizing this indicator.
Common methods of using the Ticker MACD include:
- Crossing of the main line over the signal line.
- Crossing of the zero line by either the main or signal line.
- Monitoring the increase or decrease in the main line's value compared to its previous value, similar to Bill Williams' Awesome Oscillator (AO).
- Observing divergence between the main line of the Ticker MACD and the main line of the Ticker indicator itself.
As you can see, there are numerous ways to leverage the Ticker MACD for your trading strategy!
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