MACD RSI Indicator
Best Forex BUY and SELL signals: MACD RSI indicator for MT5. Combines MACD and RSI to determine trend direction.
Description
The MACD RSI Indicator for MT5 is a simple indicator that combines two of the best indicators in the forex market; RSI and MACD. The indicator consists of three moving averages: fast EMA, slow EMA and signal SMA. Along with them, there is also a common MA of the 5-period. Here the Magenta line represents the Signal SMA and the Green-Red line represents the slow RSI.
Usually MACD draws a histogram below the chart. The MACD RSI indicator, MACD draws bars to report the general direction of the trend. Here, the RSI complements the MACD, indicating overbought and oversold conditions. Like the traditional RSI, when the price is above 70, the indicator shows an overbought condition. Conversely, when the indicator is at 30 or below, it shows oversold conditions.
Since the indicator is a momentum indicator, the MACD RSI indicator fluctuates between certain levels. The MACD RSI indicator works best on any time frame. However, it is best to use the indicator on longer timeframes.
MACD RSI Indicator BUY/SELL signals
The GBP/USD H1 chart above shows the BUY and SELL signals of the indicator. To identify BUY and SELL signals, traders must identify overbought and oversold conditions. To enter a long position, traders need to find certain conditions. First, the bars must be in the oversold zone. Second, the fast EMA should be below the slow EMA.
Sometimes the indicator satisfies these conditions, but the price moves in the opposite direction. This is due to a volatile or changing market. As such, traders should wait for the price action to continue its upward momentum before entering a trade.
Conversely, to enter a short position, a trader must meet the following conditions:
First, the bars must be in the overbought zone. Second, the slow EMA should be below the fast EMA. As with a BUY position, sometimes the indicator satisfies these conditions, but the price moves in the opposite direction. As such, traders should wait for the price action to continue its downward momentum before opening a trade.
Conclusion
The MACD RSI indicator for MT5 combines two momentum oscillators to give BUY and SELL signals. Traders can find exact entry and exit points using the indicator. In addition, you can download the indicator for free from our website.