If you’re looking to improve your trading game, then the Moving Average Convergence Divergence (MACD) Bollinger Bands (BBs) indicator may be just the tool for you. This guide will discuss what the MACD BB indicator is, how they work, and how traders utilize it in order to make profitable trades. With this comprehensive tutorial, you’ll have a better understanding of MACD BB and all that they can do for your trading strategies.
What’s MACD BB Indicator (MACD Bollinger Bands)?
The MACD BB indicator is a technical trading indicator developed by Thomas Aspray. It works by combining the Moving Average Convergence/Divergence (MACD) momentum oscillator with Bollinger Bands. The purpose of this indicator is to show potential entry and exit points for traders in the market. They are based on when the MACD signals indicate that price movements are likely to occur.
The aim of the MACD Bollinger Bands is to supply a relative relation of high and low ranges of the MACD. This is much like how they’re tailored to the common market. According to the definition, the price is high on the higher band and low on the lower band. This definition can help in rigorous sample popularity and turns out to be useful in evaluating price action to the motion of warning signs to reach systematic trading selections.
Calculation of MACD BB Indicator
The formula for the MACD BB indicator is as follows. Upper Band = Moving Average (MA) + Multiplier (M) × Standard Deviation (SD), Lower Band = MA –M×SD.
Let us now discuss how to interpret the buy and sell signals. A sell signal occurs when the MACD line goes beneath the band. A buy signal occurs when the MACD line goes above the band. That is a lot more uncomplicated to peer if the MACD line is in dotted line mode.
The MACD BB indicator comes as default in Ninja Trader and Trade Station, however, it’s not in Amibroker as the default indicator. So, we’re sharing a nice MACD BB AFL code for Amibroker (the best charting software). The indicator is coded for Amibroker and can be utilized for everyday trading. Check the picture below for the entry and exit rules.
The Download Link for the AmiBroker AFL Code of MACD BB Indicator
You can freely download and use the MACD BB indicator Amibroker AFL formula by clicking here.
However, now you will instantly see the MACD Bol Bands indicator appear in the charts in real-time in Amibroker. You may distribute this AFL to your friends but do not forget to refer them to our site for more freebies.
The MACD BB indicator is an effective tool for improving your trading performance and making better investment decisions. It helps to identify entry and exit points. As well as it provides insight into the overall trend direction of any security. With its precise signal readings, traders can make more informed decisions on entering and exiting trades based on past movements in the market’s price action — ultimately minimizing risk while maximizing return on capital invested.
Additionally, not having to manually calculate each line type frees up time that can be used instead for analysis focused on understanding asset sentiment and fundamentals. Altogether, the MACD BB provides powerful insights about potential future changes in price. Any active trader or investor interested in building wealth from their portfolio should not overlook it.