MTF MACD Indicator
An ideal tool for multi-timeframe trading. An excellent indicator for determining the overall trend of an instrument and establishing ideal entry points.
Description
As a trader, you have probably come across a multi-frame trading strategy. This strategy involves checking different time frames such as 15 minutes, 1 hour, 4 hours and daily time frames to determine the direction of the trend and identify suitable entry points. However, it is a tedious job that requires juggling different time frames. It’s also time-consuming and confusing, meaning you might miss a good signal altogether. Multi-time frame (MTF) Moving Average Convergence Divergence (MACD) indicators solve this problem.
The indicator has four lines representing four different time frames. Therefore, no matter what time frame you are working on, the indicator will show what is happening on the four specified time frames.
- The first row closest to the chart represents the daily timeframe.
- The second line represents the H4 time frame.
- The third line represents that one-hour time frame,
- The last line, furthest from the price chart, represents the 15 minute time frame.
How to use the MTF MACD indicator
Investors react differently depending on the dynamics of each time frame. For example, if you are a scalper, you will focus more on shorter time frames. However, institutional traders and long-term traders will focus more on longer time frames.
The MTF MACD indicator can help filter trades or enhance entry signals. This means checking a higher time frame to get the overall trend and a lower time frame to choose the ideal entry point. Remember, the trend is your friend, and trading against the trend is suicide, well, for your account.
To give you a clear picture, let’s assume that you want to buy. First, you should wait until the daily time frame bar turns blue. Then you should wait for the price to recover. This means waiting for other time frames to turn red. Once they turn blue again, signaling a resumption of the original uptrend, you can go long.
Trading Example
According to the indicator, the Daily, 4-hour, and 1 hour are bearish. Therefore, you should be looking to open a short position. However, timing is of paramount importance in Forex trading.
You do not want to enter a trade that is heading for a pullback. You could be right on the overall trend but suffer loss because of your entry point. The prudent thing to do is wait for a retracement.
In our example above, the market retraced on a 15 min time frame. Did you notice the MTF MACD indicator turned blue? This signifies a pullback. You should enter the trade after the indicator turns blue to red as the price resumes its initial downtrend.
Conclusion
Multi-time frame trading is a perfect way to maximize your trading result because it helps you choose an ideal entry point. But you do not have to keep checking the market behavior for several time frames. The MTF MACD indicator enables you to check four timeframes under one roof. The indicator is a must-have for people who want to boost their profits.
The MT MACD is not available on the usual MT5 Indicator database. Luckily, you can download it one our site for free. So now is your turn to download and make use of this handy indicator.
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