The MACD Flat Market Detector represents an advanced momentum indicator developed for MT4 platforms.
Its developer has added a flat market channel that determines the on-trend and sidelined market conditions. So, if you want to avoid trading in a choppy market and wish to move on within the right trend directions, then the MACD Flat Market Detector could be the right choice.
This indicator only works on 1-minute timeframe. So, you can apply it for forex scalping and day trading only. As a short-term trading tool, it may signal changes in momentum frequently. But if you filter the MACD bar signals with flat market channels, you’ll get a much better result.
Most importantly, this indicator only works for the top 5 major forex currency pairs: EURUSD, GPUSD, AUDUSD, USDCAD, and USDJPY.
The blue bars above the neutral level (0) suggest the market is in bullish momentum. On the other hand, the red bars beneath the neutral level signal a bearish momentum.
However, the bars remaining inside the flat market channel indicate a sidelined situation of the price. When the bars break above the higher line, we consider it as a bullish trend confirmation. Conversely, the bears need to break below the lower channel level to confirm a valid bearish trend.
In any case, the MACD bars changing their color means the market has started losing the strength of its current momentum. So, you can consider a weak trend signal as a hint for trade exits.
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- The indicator value is positive.
- The MACD bar turns blue and breaks the higher flat market line
- Exit long when the bar closes below the higher channel level
- The indicator shows a negative value.
- The MACD bars becomes red and breaks the lower flat market channel
- Exit short when the bar closes above the lower channel