The MACD Flat Market Detector indicator is designed to help traders identify flat markets where prices tend to fluctuate within a narrow range. However, in addition to detecting flat-range markets, it has multiple uses.
What is the MACD Flat Market Detector Indicator?
This indicator is a modified version of the classic Moving Average Convergence and Divergence (MACD) indicator. It is basically a MACD indicator with an additional threshold levels, indicate whether the market is moving in a trend or strong momentum, or whether the market is within a flat market range.
The indicator draws histogram bars, which are MACD bars. It also draws two horizontal dashed lines, which represent the threshold at which the market will be considered flat or have strong momentum or trend.
How the MACD Flat Market Detector Indicator Works?
The MACD Flat Market Detector indicator calculates the difference between fast and slow exponential moving average (EMA) lines. Then plot the differences as histogram bars.
The color of the histogram will also change according to whether the value of the current histogram is higher or lower than the previous histogram. When the value of the current bar is greater than the value of the previous bar, a blue bar is drawn, and when the value of the current bar is less than the value of the previous bar, a red bar is drawn.
The two dashed lines are based on the standard deviation of the average movement of the MACD-Histogram.
How to use the MACD Flat Market Detector Indicator for MT4
This indicator has several useful options within its settings.
“Calculate On Bar Close” causes the indicator algorithm to run only when a new bar closes making it non-repainting.
The “Fast EMA” and “Slow EMA” variables use to the number of periods used on the two EMA lines.
“Gamma” adjusts the standard deviation .
This indicator is mainly used to identify flat market ranges and range bound market conditions. This is just based on whether the histogram bars are usually within the “gamma” standard deviation range of the MACD histogram bars.
The market is considered flat when the MACD bars are usually within the two threshold lines.
And Inversely, this indicator can also be used to identify momentum breakouts and trending markets conditions.
MACD bars move strongly beyond the threshold lines indicate that a strong market momentum has developed.
MACD Flat Market Detector Indicator for MT4 (Free Download)
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