The BB MACD indicator
The BB MACD indicator is a combination of two technical analysis indicators, which have proven their value: the Bollinger bands (BB) and Moving Average Convergence Divergence (MACD).
The Bollinger bands are two bands, one below and one above a moving average. The size of the bands is a function of the increase or decrease in volatility of the market price. The MACD is a trend-following indicator. It indicates the relationship between two moving averages of the market price. The indicator visualizes market momentum. The MACD evolves up and down around a signal line. In the BB MACD indicator the Bollinger bands indicate the strength of the trend and the MACD indicates the direction of the trend.
Traders use the indicator to generate trading signals.
- A buy signal occurs when the MACD crosses above the upper Bollinger band.
- A short sell signal occurs when the MACD crosses below the lower Bollinger Band.
These are the advantages of the BB MACD indicator:
- Can be used just to indicate the trend.
- Can also be used for trading signals on all instruments.
- Merges two successful indicators.
- Provides precise entry and exit levels.
- Is easy to understand.
This example shows the BB MACD indicator. The buy and short sell signals are clearly visible.
This example shows the BB MACD indicator and the market price of the EUR/USD. The zones indicate the trades from the opening signal to the close of the position.
Practical implementation
Open the chart of an instrument. In the WHS Proposals folder, select the BB MACD indicator.