MACD Trend Histogram Bars is a free mt4 (Metatrader 4) indicator that can be used for trade entries and exits or can act as an additional trend filter.
MACD stands for Moving Average Convergence/Divergence.
The indicator appears in a sub-MT4 window as a bi-colored trend bar histogram.
The indicator can be used in various ways. I will present you with an example below:
Buy & Sell Trade Example
- Open a buy trade as soon as the first green trend bar appears on the chart.
- Open a sell trade as soon as the first red trend bar appears on the chart.
The indicator works equally well on all currency pairs (majors, minors and exotic) and shows promising results if used correctly.
Free Download
Download the “MACDBars.mq4” indicator for MT4
Indicator Chart (EUR/USD Daily)
The example chart below displays the MACD Trend Histogram Bars mt4 indicator in action.
Trading Tips:
Feel free to use your own favorite trade entry, stop loss and take profit method to trade with the MACD Trend Histogram Bars Forex indicator.
As always, trade in agreement with the overall trend and practice on a demo account first until you fully understand this indicator.
Please note that even the best trading indicator cannot yield a 100% win rate over long periods.
Indicator Specifications & Inputs:
Trading Platform: Developed for Metatrader 4 (MT4)
Currency pairs: Works for any pair
Time frames: Works for any time frame
Trade Style: Works for scalping, day trading and swing trading
Input Parameters: Variable (inputs tab), color settings & style
Indicator type: MACD
Does the indicator repaint? No.
Forex Trading Strategy: MACD Trend Histogram Bars & Ultimate Moving Average (MT4)
This strategy combines the MACD Trend Histogram Bars and the Ultimate Moving Average (UMA) indicators on MetaTrader 4 (MT4) to identify high-probability buy and sell opportunities.
The MACD Trend Histogram Bars indicator provides momentum insights, while the UMA offers a smoothed trend-following signal.
This strategy is suitable for day trading on M15 and H1 timeframes and works well for pairs like EUR/USD, GBP/USD, and USD/JPY.
Buy Entry Rules
- Wait for the MACD Trend Histogram Bars to display green bars, indicating bullish momentum.
- Ensure the UMA line is below the price, confirming an uptrend.
- Enter a buy position when both conditions are met.
- Set a stop loss below the recent swing low or a fixed number of pips, depending on your risk tolerance.
- Set a take profit target at the next significant resistance level or use a risk-to-reward ratio of at least 1:2.
Sell Entry Rules
- Wait for the MACD Trend Histogram Bars to display red bars, indicating bearish momentum.
- Ensure the UMA line is above the price, confirming a downtrend.
- Enter a sell position when both conditions are met.
- Set a stop loss above the recent swing high or a fixed number of pips.
- Set a take profit target at the next significant support level or use a risk-to-reward ratio of at least 1:2.
Advantages
- Combines momentum and trend-following indicators for higher probability trades.
- Reduces market noise, allowing for clearer trade signals.
- Works effectively on M15 and H1 timeframes for day trading.
- Helps in identifying trend reversals and continuations with minimal lag.
Drawbacks
- Requires active monitoring of charts; not suitable for completely automated trading.
- Not ideal for low-liquidity pairs due to potential slippage and wider spreads.
Case Study 1: EUR/USD M15 Buy
On the EUR/USD M15 chart, the MACD Trend Histogram Bars displayed green bars, indicating bullish momentum.
The UMA line was below the price, confirming an uptrend.
A buy position was entered at 1.1050.
The stop loss was set at 1.1030 (-20 pips), and the take profit target was set at 1.1070 (+20 pips).
The price moved upward and hit the take profit level within the session, resulting in a +20 pips gain.
Case Study 2: GBP/USD H1 Sell
During the London session on GBP/USD H1, the MACD Trend Histogram Bars displayed red bars, indicating bearish momentum.
The UMA line was above the price, confirming a downtrend.
A sell position was entered at 1.2800. The stop loss was set at 1.2820 (+20 pips), and the take profit target was set at 1.2770 (-30 pips).
The price declined steadily and reached the take profit level within the session, resulting in a +30 pips profit.
Strategy Tips
- Use M15 and H1 charts for day trading to capture intraday trends.
- Focus on major currency pairs like EUR/USD, GBP/USD, and USD/JPY for better liquidity.
- Always apply proper risk management with stop losses and take profit targets.
By combining the MACD Trend Histogram Bars and the Ultimate Moving Average, traders can develop a robust MT4 day trading strategy that leverages both momentum and trend-following indicators for high-probability trades.
