The aspiration of most people when they begin forex trading is to make it into a simple meat and potatoes operation – and trouble is, it’s probably never going to be that simple – as they tend to find out as they get further into their career.

Moving Average Convergence / Divergence is a measure of the difference between slow (long-period) and fast (short-period) exponential moving averages – EMAs – of currency pair. Because of its basis on moving averages MACD is classified as being a lagging indicator.

The fun lies in the tweaking of the parameters – starting with the standard set – 12,26,9 which fast EMA = 12 -period, slow EMA = 26 -period and 9 = signal line period – this parameter set is commonly used in stocks, but then trading forex isn’t the same thing as trading stocks. There’s a lot of scope for testing here, and a lot of literature out there on the web on this subject.

One of the tried and tested tips here is to get a toolbox of indicators for forex trading that you can trust – nothing too large and unwieldy – the mistake is often to try to follow a vast number of indicators, rather than learn the behavior of a small number of forex indicators accurately. MACD.

Download mq4 EA: MACD_var.zip