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NonLag MACD is a trading algorithm based on a modification of the standard forex indicator MACD. Its calculations are considered more accurate, since in addition to using the indicator itself, NonLag MACD applies additional filters that serve to identify indicator inaccuracies. NonLag MACD is used in trading to identify the current direction of the trend and its strength, which in turn allows determining the optimal moment for opening trades. The indicator itself is presented in the lower window of the price chart in the form of a histogram with a signal line, which, when determining market conditions, are painted in a certain color. Thus, taking into account these values indicator determines the direction of the trend, and at the same time the moment of opening a position.
The NonLag MACD indicator is suitable for trading any currency pair on any timeframe.
Input parameters
The settings of the NonLag MACD indicator consist of an extended list of input parameters that allow configuring parameters that are responsible for its technical operation and general functioning. The Colors section in its settings is responsible for the general visualization and color scheme, while the Levels section is used to add to the indicator window signal levels.
- Fast NonLag period - period of the fast NonLag MACD line. The default value is 5.
- Slow NonLag period - value of the period of the indicator's slow line. The default value is 11.
- Signal period - value of the period of the signal line of the indicator. The default value is 9.
- Fast NonLag method - period of the indicator's signal line. The default value is Simple.
- Slow NonLag Method - the type of smoothing of the indicator's fast line. The default value is Simple.
- Signal method - smoothing method applied to the slow indicator line. The default value is Simple.
- Signal method - type of smoothing of the signal line. The default value is Simple.
- Applied price - type of price to which indicator calculations are applied. Close price by default.
- Filter - indicator signal filtering value. The default value is 0.
- Deviation (price) - current value of the price deviation from the standard value. The default value is 0.0.
Indicator signals
To open a certain transaction using the NonLag MACD indicator, it should be determined the direction and strength of the current trend. To do this, it should be taken into account the direction of the histogram and the signal line, as well as their color. If the indicator determines an uptrend, long positions are opened, if the trend is down, short positions are opened. When the current trend changes, current trades are closed.
Signal for Buy trades:
-The histogram of the indicator together with the signal line is located above level 0 and has a color with a growth value. At the same time, the new histogram column is higher than the previous one.
Upon receipt of such conditions, a buy trade can be opened on a signal bullish candle. At this moment, an uptrend is determined in the market. If the trend changes or weakens, namely, when the color or direction of the histogram changes, the trade should be closed. At the same time, at this moment, it can be considered opening new trades.
Signal for Sell trades:
-Histogram bars are formed below each other relative to level 0. At the same time, the histogram itself, together with the signal line, is colored with a drop value.
A sell trade can be opened immediately upon receipt of such conditions that characterize the presence of a downtrend in the market. Upon receipt of the opposite conditions from the indicator, namely, when the color or direction of the histogram changes, the trade should be closed. At this moment, a change or weakening in the current trend is possible, which will allow considering the opening new trades.
Conclusion
The NonLag MACD indicator is very effective, since its calculations are based on the functioning of the indicator, the accuracy of which has been proven by time. The indicator is very easy to use due to its convenient visualization, which in turn also allows traders with different levels of experience to use the indicator. To obtain the necessary trading skills to use indicator is recommended to practice on a demo account.
You may also be interested The NonLag Dot trend trading indicator for MT5
