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The Smoother Momentum MACD indicator is a small trading strategy based on the operation of several Forex indicators included in its standard set. The indicator's calculations are aimed at determining the presence of a trend, its direction and strength, which in turn also allows determining the moment of opening a trade. The indicator is presented in the lower window of the price chart in the form of a solid line that changes its color and direction depending on the current market conditions. Taking into account the values of the indicator, the current trend is determined, and at the same time a trade is opened.
The Smoother Momentum MACD indicator works equally effectively on any timeframe, with any currency pairs, so their choice does not matter.
Input parameters
There are several sections in the settings of the Smoother Momentum MACD indicator. Thus, the Input Parameters section is responsible for the technical operation of the indicator, the Colors section is responsible for its general visualization, and the Levels section is used to add signal levels to the indicator window.
-Fast momentum period - period of calculation of the fast indicator Momentum. The default value is 12.
-Slow momentum period - value of the period of the slow indicator Momentum. The default value is 50.
-Price - type of the price to which the indicator calculations are applied. By default, it has the Close price value.
Indicator signals
The Smoother Momentum MACD indicator is very easy to use due to its visualization. To open a certain trade using the indicator, one should take into account the direction, color and position of its line relative to the signal level. If the current trend is upward, long positions are opened, if the trend is downward, short positions are opened. When the current trend changes, in both cases, trades are closed. If the trend is not determined on the market, then trades should not be opened.
Signal for Buy trades:
- The indicator line has a color with a growth value and moves up, being above the 0 level.
Upon receipt of such conditions, a buy trade can be opened on the signal candle due to the presence of an uptrend. At the moment of its change, namely, when the color and direction of the indicator line changes, the current trade should be closed and a new one should be considered.
Signal for Sell trades:
- The indicator line crosses level 0 down and has a color with a fall value.
A sell trade, due to the presence of a downtrend, can be opened immediately upon receipt of such conditions on a signal candle. The trade should be closed and a new one should be considered when the current trend changes, namely, when the opposite conditions are received from the indicator.
Conclusion
The Smoother Momentum MACD indicator is a very powerful trading algorithm, as it includes indicators whose effectiveness has been proven by time. At the same time, to improve the accuracy of its signals, it is recommended to use it with additional indicators, filters and advisers.
