The MACD Color MT4 indicator is a colored version of the traditional MACD technical analysis indicator.
The colored version displays green and red histogram bars in a separate window below the activity chart.
- Green colored MACD bars indicate the trend is bullish
- Red colored MACD bars indicate the trend is bearish
Like all other oscillator type indicators, use it together with a trend following indicator for more accurate trading signals.
Good trend following indicators include simple moving averages, exponential moving averages, parabolic sar,…
The color MACD indicator deploys the following default settings: Fast EMA (12), Slow EMA (26) and Signal EMA (9).
Feel free to experiment with the MACD settings to suit your needs.
You can do so directly from the indicator’s inputs menu.
Free Download
Download the “macd-color-indicator.mq4” MT4 indicator
Indicator Chart (EUR/USD H1)
The EUR/USD H1 chart below displays the MACD Color forex indicator in action.
Basic Trading Signals
Signals from the MACD Color forex indicator are easy to interpret and goes as follows:
Buy Signal: Open buy order when the MACD color indicator displays a green histogram bar.
Sell Signal: Open sell order when the MACD color indicator displays a red histogram bar.
Trade Exit: Close the open trade when an opposite signal occurs, or use your own method of trade exit.
MT4 Strategy: MACD Color + Free Forex Scalping Indicator for M1 & M5
This MT4 scalping strategy combines the MACD Color Indicator and the Free Forex Scalping Indicator to capture fast, intraday price moves.
The MACD Color Indicator shows green histograms above zero for bullish trends and red histograms below zero for bearish trends.
The Free Forex Scalping Indicator provides clear entry signals with green bars for buy trades and red bars for sell trades.
Using both indicators together allows traders to enter trades in the direction of the trend while following momentum signals for fast scalp opportunities.
This strategy works best on M1 and M5 charts for rapid scalping sessions.
It is ideal for traders looking for quick trades during high liquidity periods with well-defined trend alignment and entry signals.
Buy Entry Rules
- The MACD Color indicator shows a green histogram above zero, confirming a bullish trend.
- The Free Forex Scalping Indicator displays green bars, signaling a buy opportunity.
- Enter the trade immediately after both conditions are met.
- Place a stop loss below the recent swing low or support level.
- Take profit when the Free Forex Scalping Indicator turns red or the MACD histogram turns red, typically targeting 4-7 pips on M1 and 6-10 pips on M5 charts.
Sell Entry Rules
- The MACD Color indicator shows a red histogram below zero, confirming a bearish trend.
- The Free Forex Scalping Indicator displays red bars, signaling a sell opportunity.
- Enter the trade immediately after both conditions are met.
- Place a stop loss above the recent swing high or resistance level.
- Take profit when the Free Forex Scalping Indicator turns green or the MACD histogram turns green, typically targeting 4-7 pips on M1 and 6-10 pips on M5 charts.
Advantages
- Combines trend confirmation with precise entry signals for high-probability scalp trades.
- Effective for lower timeframes, providing multiple intraday trading opportunities.
- Helps avoid counter-trend entries by requiring alignment between the MACD trend and scalp signals.
- Works well across major and minor currency pairs during active sessions.
Drawbacks
- Requires rapid execution and focus due to fast M1-M5 price movements.
- Scalping can be stressful for traders who cannot monitor charts continuously.
Case Study 1: EURUSD M1
During the London session, EURUSD showed a green MACD histogram above zero and the Free Forex Scalping Indicator displayed green bars.
A buy trade was executed with a stop below the recent swing low.
Price moved upward quickly and the trade was closed when the scalp indicator turned red, capturing 5 pips.
Aligning trend and scalp signals allowed a high-probability intraday scalp.
Case Study 2: GBPJPY M5
GBPJPY displayed a red MACD histogram below zero and the Free Forex Scalping Indicator showed red bars during the New York session.
A sell trade was entered with a stop above the recent swing high.
Price moved downward steadily and the trade was closed when the scalp indicator turned green, securing 8 pips.
Combining both indicators ensured a reliable short-term trend-aligned scalp.
Strategy Tips
- Focus on major pairs during high liquidity sessions for more consistent scalp opportunities.
- Only take trades when both the MACD trend and scalp signal align to avoid false entries.
- Use small pip targets to match the fast M1 and M5 timeframes.
- Place stop losses at logical swing points to manage risk effectively.
- Limit active trades to 1-3 currency pairs at a time to maintain focus and prevent mistakes.
- Monitor the histogram and scalp bars closely for early exit signals to lock in profits quickly.
Download Now
Download the “macd-color-indicator.mq4” Metatrader 4 indicator
MT4 Indicator Characteristics
Currency pairs: Any
Platform: Metatrader 4
Type: chart pattern
Customization options: Variable (FastEMA, SlowEMA, SignalSMA) Colors, width & Style.
Time frames: 1-Minute, 5-Minutes, 15-Minutes, 30-Minutes, 1-Hour, 4-Hours, 1-Day, 1-Week, 1-Month
Type: Oscillator
