Moving Average Candlesticks Indicator MT4 | MT5

Since it is based on the MA indicator, the MAC indicator for MetaTrader 4 falls under the trend-following category of indicators that integrates candlestick patterns to provide traders with clearer visual insights. It modifies its candle colors between blue and yellow to highlight bullish or bearish conditions to help traders identify the market direction, support and resistance levels, and any trend reversal.

Applying this indicator on an MT5 chart also, traders can use it in several strategies, each one having its own interpretation:

• Trend identification:

- If the indicator's candlesticks are blue and remain below the price's candle, the trend is upward.

- If the indicator's candlesticks are yellow and stay above the price's candle, the trend is downward.

• Potential reversal:

- If the blue candlesticks break above the last resistance level (last lower high blue candlesticks) during the downtrend, that signals a bullish reversal.

- If the yellow candlesticks break below the last support level (last higher low yellow candlestick) during the uptrend, that signals a bearish reversal.

This indicator is useful for traders who rely on simple trend identification, using the support and resistance levels, to identify the market direction by providing them with a clearer visual representation of the chart, smoothing out price noises.

In the following two trading examples, I will explain how traders can make informed trade decisions using this simple indicator.

On the GBPUSD Daily chart in MetaTrader 4, when the blue candlesticks break above the previous resistance level, it signals the beginning of the bullish momentum. When the candlesticks change colors to yellow, it may suggest either a bearish reversal or a simple correction. The last anticipation occurred, at this time, as the blue candlesticks reappeared, breaking above the resistance level, and the upward continued. Later, toward the end of the uptrend, the yellow candlesticks reappeared and broke below the last support level, confirming trend reversal. This signaled that the bears had taken control of the market, and the trader should now exit his long position and consider entering short.

On the EURJPY M30 chart in MetaTrader 5, when the yellow candlesticks break below the previous support level, it indicates the start of the bearish movement. When the candlesticks change colors to blue, it may suggest either a bullish reversal or a simple correction. The last expectation happened at this time, as the yellow ones reappeared and broke below the last support level, and the downtrend continued. Later, near the trend's end, the blue candlesticks reappeared and broke above the previous resistance level, confirming market reversal. This signaled that the bulls had taken control, and the trader should now exit his short position and consider entering long.